STATE OF PLAY

The last available date for extending the transition period expired this week. The UK and the EU must, therefore, find an agreement before the end of December, or prepare for a ‘no-deal’ scenario. Speaking to the Bundestag, Chancellor Angela Merkel of Germany, which currently holds the presidency of the EU, warned that “To put it mildly, progress in the negotiations has been very limited. I will continue to press for a good solution. But we in the EU and also in Germany must and should prepare for the event that an agreement is not reached after all.”

Meanwhile, a restricted round of negotiations between UK Chief Negotiator David Frost and his counterpart Michel Barnier concluded yesterday ahead of schedule, as the parties “covered all the ground they set out to discuss” according to a UK official spokesman.

“Serious divergences remain” according to a statement issued by Barnier, and the EU needed its positions “to be better understood and respected” by the UK. In his view, Brussels had “listened carefully” to PM Boris Johnson, and has been exploring how to address his red lines, including the creation of a regulatory “level playing field” for trade which would be acceptable to the UK. It was now for the UK to show that it understood the core EU positions, including the need for “an overarching institutional framework and effective dispute settlement mechanisms”.

The talks are scheduled to continue in London next week.

In other news –

– A leaked HM Revenue & Customs (HMRC) document revealed that, from January 2021, firms in Great Britain supplying goods to Northern Ireland will be required to complete three rounds of customs, security and transit forms on all goods. The electronic documents will apply to all suppliers and must be completed in all instances.

– According to another leaked UK Government document, UK companies could be required to obtain permission from HMRC before they can export their goods to the EU. Lorries carrying goods would have to show a valid reference from the “Goods Vehicle Movement Service”, an untested IT platform currently under development. If these plans are confirmed, customs paperwork would need to be filed by hauliers electronically in advance of transportation. Trucks without clearance would be barred from crossing borders. It remains unclear how the policy would be enforced.

– The UK and the EU accused each other of holding up a decision on the financial equivalence of the City of London, after both missed the June 30 deadline to complete assessments on the regulatory regimes for financial services.

 OTHER KEY DEVELOPMENTS

 – The UK and Switzerland have signed a joint statement committing to negotiate a financial services trade agreement to support access to each other’s markets after the Brexit transition.

– Irish and EU officials have reached a preliminary agreement that will allow Irish food exports to access ‘green lanes’ when leaving ferries traveling from the UK to continental ports. The deal, which must still be approved by EU Member States, will require a change in the EU rules governing the surveillance of food coming into the single market.

– More than 100 UK CEOs, entrepreneurs and business groups have written to PM Boris Johnson warning that it would be “hugely damaging” to the economy if the UK leaves the EU without a deal.