Statement following end of round 3 of negotiations with the EU

The following is a statement from David Frost, UK Chief Negotiator, following the end of round 3 of negotiations with the EU today. 

 

David Frost, UK Chief Negotiator:

 

“We have just completed our third negotiating round with the EU, once again by videoconference.  I would like to thank Michel Barnier and the negotiating teams on both sides for their determination in making the talks work in these difficult circumstances.

 

“I regret however that we made very little progress towards agreement on the most significant outstanding issues between us.  

 

“It is very clear that a standard Comprehensive Free Trade Agreement, with other key agreements on issues like law enforcement, civil nuclear, and aviation alongside, all in line with the Political Declaration, could be agreed without major difficulties in the time available.  Both sides have tabled full legal texts, there are plenty of precedents, and there is clearly a good understanding between negotiators.

 

“The major obstacle to this is the EU’s insistence on including a set of novel and unbalanced proposals on the so-called “level playing field” which would bind this country to EU law or standards, or determine our domestic legal regimes, in a way that is unprecedented in Free Trade Agreements and not envisaged in the Political Declaration.  As soon as the EU recognises that we will not conclude an agreement on that basis, we will be able to make progress.   

 

“Although we have had useful discussions on fisheries on the basis of our draft legal text, the EU continues to insist on fisheries arrangements and access to UK fishing waters in a way that is incompatible with our future status as an independent coastal state.  We are fully committed to agreeing fishing provisions in line with the Political Declaration, but we cannot agree arrangements that are manifestly unbalanced and against the interests of the UK fishing industry.

 

“It is hard to understand why the EU insists on an ideological approach which makes it more difficult to reach a mutually beneficial agreement.   

 

“We very much need a change in EU approach for the next Round beginning on 1 June.  In order to facilitate those discussions, we intend to make public all the UK draft legal texts during next week so that the EU’s Member States and interested observers can see our approach in detail.  

 

“The UK will continue to work hard to find an agreement, for as long as there is a constructive process in being, and continues to believe that this is possible.” 

 

Strictly background – not for quoting

 

On Trade in Goods the talks have strengthened each party’s understanding of areas of convergence in the core provisions through further exploration of respective legal texts. This has been supported by a series of non-papers shared by the UK on third country cumulation, SPS equivalence, TBT annexes and trade remedies, as well as details on product specific Rules of Origin. Despite this, the EU’s combined offer continues to fall short of what we can and should deliver and is below that found in recent EU FTAs. Fundamental areas of divergence remain on third country cumulation, MRA and Sectoral Annexes and equivalence in SPS. The EU continues to reject UK proposals outright, despite commitments in the political declaration to reduce unnecessary barriers to trade, the benefits that EU and UK business see in taking such action, and that the EU has these provisions in other texts.  The EU is also declining to enter into meaningful discussion on product specific Rules of Origin. It is worth remembering, despite the EU seeking to portray its proposals as an offer, that the EU exports nearly £100bn more goods to UK than UK exports to EU, and well over double the amount of agri-food.

 

On Services, detailed discussions continued, supported by legal texts and UK position papers on mode 4 and professional and business services. However, the Commission obstructed progress on the basis that the discussions were moving faster than other workstreams and set conditions for continuing for discussing services in the next round, including parallel progress on open and fair competition. There remains a high degree of convergence in a number of key areas, including intellectual property. Areas of continued disagreement include data provisions, certain aspects of financial services, geographical indications and public procurement. It is worth remembering that, despite what the EU would claim, services is a major part of both our economies: in 2018 the EU27 exported €2 billion in accounting, auditing, bookkeeping, and tax consulting services, and €1.5 billion in legal services to the UK. 

 

On fisheries, the UK’s presentation of draft legal text generated some useful discussion and identified a number of areas on which the EU and UK have similar interests and progress could be made. However, the areas where we disagree remain fundamental. The UK’s position here is simple, reasonable and straightforward; it is not maximalist. From this week, we have been clear that we are willing to offer a new fisheries framework agreement, we are willing to consider granting access to EU to fish in our exclusive economic zone and agree sharing opportunities based on the principles of zonal attachment. We have provided significant amount of detailed information and have remained open and willing to work together on solutions for an agreement. However, the EU have taken a maximalist position which seeks to tie a fisheries agreement to the wider FTA, maintain the current access provisions it enjoys and rejects zonal attachment as the basis for future sharing arrangements. Until the EU is willing to accept new realities mean changes to the status quo, it will be difficult to move forward.   

 

On Open and Fair Competition, we have had three days of constructive exchanges where both sides have engaged fully and faithfully on principles and substance. While we have been able to identify a number of areas of convergence, there remains a fundamental difference between our approaches. The EU is defining progress as a willingness of the UK to accept a set of unprecedented conditions that are simply unacceptable to us and can never form the basis of an agreement. Our approach and legal text contains robust, tried and tested mechanisms that protect open and fair competition and which is wholly aligned with the Political Declaration. 

 

On governance we put forward a range of proposals in more technical areas, such as Good Regulatory Practice and, even sensitive issues like tax. But the EU continues not to engage on the fundamental principles on which the UK’s position is based, and on which we will not move.  In particular, we continued to reiterate this week that this government will never allow our laws to be aligned to the EU’s, or for the EU’s institutions, including the Court of Justice, to have any jurisdiction in the UK.  

 

On law enforcement, discussions this week covered a range of capabilities, with constructive exchanges in some areas. We welcome a balanced and reciprocal agreement in this area – it is in our mutual interest to keep our citizens safe. However, while the EU’s offer is firmly based on third country precedents, it comes with unprecedented obligations on the role for the ECJ, and provisions that seek to control the UK’s domestic implementation of the ECHR. That is clearly unacceptable. 

 

On energy, we continued with technical discussions in which the UK has proposed efficient electricity & gas trading over the interconnectors. These arrangements are mutually beneficial – they help UK and EU businesses and consumers, enable efficient trade with the island of Ireland, and support renewable investments in the North Sea. On climate change, the UK is a global leader with our commitment to net zero emissions and in our role as COP26 President with Italy. We see the case for cooperation with the EU in tackling climate change, but we will not tie ourselves to EU laws and ECJ oversight.  

 

On civil nuclear cooperation we covered nuclear safety, and each side explained their positions and responded to questions. We also discussed safeguards including going through some of the technical detail in answer to questions that both sides had sent in advance. 

 

On mobility and social security coordination, we had a detailed discussion of our respective positions and presented further information on the UK’s benefits system. While there is some degree of convergence, there remains a number of areas of divergence. 

 

On air transport and aviation safety there was some convergence on traffic rights and several related technical provisions, but continues to be disagreement on ownership and control, as well as the scope of the annexes to the aviation safety agreement.

 

On road transport (i.e. international road haulage, buses and coaches) we further clarified our respective positions.  Both sides are proposing rights for UK and EU hauliers to carry goods between the UK and the EU, and we explored the scope for some additional rights that would support efficient operation by reducing the numbers of empty lorries on the roads.    

 

On EU programmes, we continued talks on the general terms for participation. Talks were constructive but there are key points of divergence in our respective approaches, including on the financial contributions provisions and the EU’s proposed termination and suspension provisions.  We’ve been clear that the UK is considering participation in certain Union programmes where that is in our mutual interest – but the terms must be fair and appropriate.  We also remain committed to making progress on Peace+, and we had a useful discussion on this programme this week which we would like to build on going forward.  

 

On thematic security issues (including on health security, security of information and on our future arrangements on asylum and illegal migration) we believe there is mutual benefit in ensuring that information about new and emerging health threats continues to be shared and we look forward to make further progress on this in future rounds. We also presented the UK legal text on Asylum and Illegal Migration cooperation, and await a response from the EU on their willingness to reach an agreement in this area.