Left Menu
Development News Edition

Britain, EU split on state aid in crunch week of trade talks - sources

British and EU trade negotiators have failed to close the gap on state aid, a key element barring their new agreement on post-Brexit trade ties, officials and diplomatic sources with the bloc said as 27 national leaders gather in Brussels on Thursday. The two-day summit in Brussels is due to deal with foreign policy but chairman Charles Michel and the bloc's executive will also on Friday give their latest assessment on Brexit.

Reuters | Brussels | Updated: 01-10-2020 13:29 IST | Created: 01-10-2020 13:10 IST
Britain, EU split on state aid in crunch week of trade talks - sources
Representative Picture.

British and EU trade negotiators have failed to close the gap on state aid, a key element barring their new agreement on post-Brexit trade ties, officials and diplomatic sources with the bloc said as 27 national leaders gather in Brussels on Thursday.

The two-day summit in Brussels is due to deal with foreign policy but chairman Charles Michel and the bloc's executive will also on Friday give their latest assessment on Brexit. Disagreements over corporate subsidies, fisheries, and ways to solve disputes have overshadowed trade talks, while a proposed UK law that would undermine its earlier divorce deal with the bloc triggered a new crisis last month.

Britain's lower house of parliament approved the Internal Market Bill on Tuesday and it is now with the House of Lords. Britain say ensuring that its nations can trade freely with each other after Brexit would require breaking the divorce deal provisions on the sensitive Irish border. The executive European Commission, which negotiates with Britain on behalf of all the bloc's members, wants London to agree to broad state aid rules that would be compatible with those the EU has.

The bloc wants an independent British regulator to decide on state aid there, as well as seeks a new EU-UK dispute settling mechanism that would create a new Joint Committee and an Arbitration Panel to adjudicate. Should one side fail to honor decisions made through that process, the Arbitration Panel could impose fines and the other side could retaliate by hitting bilateral trade elsewhere.

"The problem is that the UK doesn't want to follow that path," an EU diplomat following Brexit told Reuters. An EU official, who is involved in the talks, echoed that: "It remains to be seen if the UK can sign up to that ... We haven't got there yet. Not sure we'll ever get there."

Britain has opted for more lenient procedures typical for free trade agreements and said Brussels would no longer have even an indirect say in its policy on corporate subsidies.

"WITHDRAW INTERNAL MARKET BILL"

With time available until the end of the year running out, the pressure is growing on the EU and UK to seal a deal to avoid putting an estimated trillion euros of annual trade at risk. This week's ninth negotiating round is the last scheduled so far and EU leaders will again assess progress on Oct.15-16.

They could switch to contingency planning for the most damaging economic split without new arrangements or, should trade talks cover enough ground, authorize final make-or-break negotiations known as the "tunnel" until the end of the month. The EU says a deal must be at hand by early November to give the European Parliament and some national parliaments enough time to ratify it before Britain's standstill post-Brexit transition expires at the end of the year.

A senior EU diplomat said the bloc has become more hopeful over the last fortnight that Prime Minister Boris Johnson - the key face of the Brexit campaign that took Britain out of the bloc this year - was looking for a deal despite the new legal controversy that increased risk of a 'no-deal' exit. "Signals are being sent that suggests a more hopeful scenario, and certainly the UK government has been signaling a very strong interest in entering the tunnel," the diplomat said. "We remain hopeful that a deal will be concluded."

But EU sources were also adamant that the bloc would not ratify or implement any new UK deal as long as London undermines the divorce treaty. "The (final) agreement ... will be contingent on the withdrawal of the Internal Market Bill," said the senior EU diplomat.


TRENDING

OPINION / BLOG / INTERVIEW

Kenya’s COVID-19 response: Chaos amid lack of information

Confusing numbers and scanty information on how effective curfews and lockdowns have been in breaking transmission have amplified coordination and planning challenges in Kenyas response to COVID-19. Without accurate data, it is impossible t...

Farkhad Akhmedov: Calculating the price of impunity from the law

In insistences such as the battle over the Luna, Akhmedov has resorted to extreme legal machinations to subvert the High Courts decision and keep his assets from being seized. ...

Guinea’s elections hearken back to the autocracy and violence of its past

... ...

Pandemic-era FinCEN leaks ratchet up the urgency of lifting the veil on financial secrecy

As the coronavirus pandemic reverses decades of gains in combatting inequality, its more urgent than ever that authorities excise the dirty money that has metastasized within the financial systems guts....

Videos

Latest News

Ireland imposes some of Europe's toughest COVID-19 curbs

Ireland announced some of Europes toughest COVID-19 constraints on Monday, shutting non-essential retail, limiting restaurants and pubs to take away service and telling people not to travel more than five kilometres 3 miles from their home....

Ireland aiming to return to Level 3 restrictions by Dec.1, PM says

The Irish government is aiming to return to Level 3 COVID-19 restrictions at the end of the six week period on the highest stage, Level 5, that will kick in this week, Prime Minister Micheal Martin said on Monday.In order to do so, the gove...

French activists say 100,000 hurt by Total's Ugandan oil operation

Over 100,000 people in Uganda and Tanzania have been hurt by human rights violations linked to the Totals oil operations in Uganda, two French activist groups said in a report on Tuesday. Friends of the Earth and a second group called Survi...

Motor racing-Larson reinstated by NASCAR after racial slur

Kyle Larson, who was suspended by NASCAR and fired by his team Chip Ganassi Racing for using a racial slur during a live streamed iRacing esports event in April, has been reinstated NASCAR said on Monday. Kyle Larson has fulfilled the requi...

Give Feedback