Statement from David Frost, UK Chief Negotiator, to conclude this week’s negotiating round with the EU

“We have just concluded our latest round of negotiations with the EU. These were the first formal trade discussions to have taken place in London during these talks and were part of the intensified process agreed for July.

“It is unfortunately clear that we will not reach in July the “early understanding on the principles underlying any agreement” that was set as an aim at the High Level Meeting on 15 June. At that meeting, the Prime Minister set out once again the fundamental principles which we have repeatedly made clear would need to underpin any future agreement and which are intrinsic to the UK’s future as an economically and politically independent country. Any agreement needs to honour these principles in full. The EU’s proposals so far, while a welcome response to the Prime Minister’s statement, do not do so, and therefore substantial areas of disagreement remain.

“Specifically, the EU has listened to the UK on some of the issues most important to us, notably on the role of the Court of Justice, and we welcome this more pragmatic approach. Similarly, we have heard the EU’s concerns about a complex Switzerland-style set of agreements and we are ready to consider simpler structures, provided satisfactory terms can be found for dispute settlement and governance.

“We have also had constructive discussions on trade in goods and services, and in some of the sectoral agreements, notably on transport, social security cooperation, and participation in EU programmes. We have also continued to deepen our understanding of each other’s constraints on law enforcement.

“But considerable gaps remain in the most difficult areas, that is, the so-called level playing field and on fisheries. We have always been clear that our principles in these areas are not simple negotiating positions but expressions of the reality that we will be a fully independent country at the end of the transition period.

“That is why we continue to look for a deal with, at its core, a free trade agreement similar to the one the EU already has with Canada – that is, an agreement based on existing precedents. We remain unclear why this is so difficult for the EU, but we will continue to negotiate with this in mind.

“Looking forward, there are large areas of convergence in many of the areas on which we are negotiating and ample precedents and texts on which we can base our work. We will keep working hard to bridge the gaps and find a way through.

“When the next round of negotiations begins there will be not much more than four months left until the end of the transition period. Although we will continue energetically to seek an agreement with the EU, we must face the possibility that one will not be reached, and we must therefore continue preparing for all possible scenarios for the end of the transition period at the end of this year.

“Despite all the difficulties, on the basis of the work we have done in July, my assessment is that agreement can still be reached in September, and that we should continue to negotiate with this aim in mind. Accordingly we look forward to welcoming the EU team back to London next week as planned for informal discussions and to the next negotiating Round beginning on 17 August.”

STRICTLY BACKGROUND- not for quoting

On Trade in Goods we had a constructive round of talks where we clarified areas of convergence and divergence across all of the core chapter texts and engaged in technical discussions on specific issues.

On services, investment and other FTA issues, the UK and EU continued technical discussions to prepare for consolidating legal texts, if that can be agreed for negotiations in August and September.

On fisheries, this round focused mainly on quota sharing arrangements and the list of stocks for which quota shares need to be agreed. Little progress was made and fundamental divergences remain on the basis on which quota should be shared. The UK’s position is that sharing fishing opportunities should be based on the scientific principle of zonal attachment, which better reflects where the fish live. The EU continued to argue to maintain the status quo on quota sharing. The UK’s position continues to be to advocate a fisheries framework agreement which reflects our rights under international law and which provides for annual negotiations over access to each other’s exclusive economic zone and sharing fishing opportunities based on the scientific principle of zonal attachment.

On the so-called “level playing field” both sides engaged in a detailed round of talks covering labour, environment, climate, sustainable development and subsidy control. We have made some positive progress on some of these issues but challenges remain, particularly in the area of subsidy control. We have offered a detailed, robust legal text, which build on WTO rules. The EU needs to engage with these proposals to unlock progress.

On law e nforcement we continued the conversation about the EU’s preconditions (fundamental rights and data protection) which was positive in tone and substance, although these will remain difficult issues to resolve for both sides. On the substantive cooperation, there appears still to be more that we agree on than disagree on, which is helpful as a considerable amount of technical work will need to be completed if the key issues are addressed.

On energy, we had further discussions on revised UK proposals tabled earlier in July for efficient electricity trading arrangements over the interconnectors. These arrangements would help UK and EU businesses and consumers, enable efficient trade with the island of Ireland, and support renewable investments in the North Sea. The EU are reluctant to consider these and instead push a series of other obligations, many of which are not relevant to cross-border trade.

On UK participation in Union programmes we had in depth technical discussions including on the rights of UK participants and the termination and suspension provisions. We also discussed service access arrangements on EGNOS and SST. We also had a constructive discussion on Peace+, which we look forward to further discussing in future rounds.

On social security coordination we have had constructive discussions and there has been some narrowing of the gap between our positions.

On air and road transport we have narrowed down the issues and are making progress. On aviation safety, discussions have not moved forward.

On civil nuclear we have made progress towards an agreement.

On governance, we had detailed discussions on potential structures for the agreement(s) and on dispute settlement arrangements.