STATE OF PLAY

On 22 October, the EU and UK resumed discussions on the future trade agreement after the UK lifted its block on negotiations.

The breakthrough came in a call between Michel Barnier, the EU’s chief negotiator, and David Frost, his UK counterpart, who agreed a 10-point plan for the “next and final phase of the negotiations”.

The plan includes working through weekends and establishing a “small joint secretariat… to hold a master consolidated text”.

Negotiations had been put on hold last week, when PM Boris Johnson demanded a “fundamental” rethink from the EU before allowing further discussions.

Although Number 10 has not set a new timetable for the conclusion of a deal, officials in London are looking at a final phase of negotiations leading to an agreement in early November.

Negotiations remain stuck on three main unresolved issues: fishing rights in UK waters, fair competition rules for businesses and mechanisms for resolving future disputes.

Meanwhile, less than three months before the end of the UK’s Brexit transition period, the Government launched a new campaign warning businesses that “time is running out” to prepare.

Johnson and Cabinet Office Minister Michael Gove hosted a videoconference with 250 business leaders to discuss the readiness of companies for the UK’s exit from the EU single market and customs union on 31 December.

During the call, CBI Director-General Carolyn Fairbairn proposed that the Government creates a joint taskforce of Ministers and industry representatives, with the aim of accelerating preparations for the end of the Brexit transition period.

However, with companies focused on the Covid-19 crisis, business leaders, including the CBI, warned that a Government campaign to inject urgency into Brexit preparations might be too little, too late, with many companies still in the dark about the impact of leaving the EU.

OTHER KEY DEVELOPMENTS
  • With a majority of 226, the House of Lords has adopted a regret motion warning that the Internal Market Bill “would undermine the rule of law and damage the reputation of the United Kingdom”. This is the heaviest defeat for a UK Government in more than 20 years. The Bill will not be affected by the Lords vote, as a regret motion only gives “members an
    opportunity to put on record their dissent”, according to parliamentary protocol.
  • The European Automobile Manufacturers’ Association (ACEA) — a group that represents companies including BMW, Toyota and Fiat — has called on the EU to take a less restrictive stance on future market access to the UK, warning that aspects of the bloc’s current position are “not in the long-term interests of the EU automotive industry”.
  • In a letter sent to the Government, the leaders of 39 food and drink industry bodies have said they are concerned that several issues facing trade between Great Britain and Northern Ireland at the end of the Brexit transition period have yet to be addressed. They warned that
    many of their member may consider pulling out from Northern Ireland because of increased trading costs caused by the UK’s exit from EU trading rules.
THE NEW TRADE DEALS
  • The UK has completed its first large post-Brexit trade deal after signing an agreement with Japan that will take effect from 1 January 2021. The deal will need to be ratified, but passage through the Japanese Diet is expected to be uncontentious.
  • The UK has signed a temporary agreement with Norway to ensure that trade of the goods can continue between the two nations in the case of a no-deal Brexit after 31 December.