State of Play

 After this week’s negotiations in Brussels concluded, EU Chief Negotiator Michel Barnier warned that “despite EU efforts to find solutions, very serious divergences remain” on the three main outstanding issues, which are “essential conditions for any economic partnership.”

UK Chief Negotiator David Frost issued a similar statement, stressing that work continues “to find solutions that fully respect UK sovereignty.” Barnier suggested, however, that the UK is playing a dangerous game of brinkmanship.

Meanwhile, the European Parliament’s Trade Committee Chair, Bernd Lange, stated that MEPs cannot wait much longer, adding that he is “on the verge of losing [his] patience and rejecting the project, because it really can no longer comply with democratic principles”.

Echoing his comments, German MEP David McAllister, who chairs the European Parliament’s UK Coordination Group, said that it was of the “utmost importance” that negotiators allowed enough time for the assembly to scrutinise any draft deal. 

Formal talks are due to resume in London on Monday. 

In Separate News
  • The European Commission has said that court action against the UK will move to the next phase, after PM Boris Johnson missed the 31st October deadline for replying to the Commission’s formal letter of notice about the Internal Market Bill. If approved, the Bill will allow the UK Government to breach the Withdrawal Agreement signed earlier this year. 
  • The National Audit Office (NAO) – a Government agency – has found that there will be “significant disruption” to trade whether or not a new deal with the EU is agreed. Preparations for border controls are deemed to be severely behind schedule, with IT systems yet to be tested, port and other infrastructure yet to be completed and insufficient new customs agents recruited. The NAO also expressed concerns that plans to oversee goods moving between Great Britain and Northern Ireland will not be ready in time. 
  • At the fourth meeting of the Ireland/Northern Ireland Specialised Committee held on 5 November, the two sidestook stock of the progress made on the process for identifying Northern Ireland traders for VAT purposes and enabling them to reclaim VAT through existing IT databases when trading in goods with the EU; and for transit procedures to be available in Northern Ireland and operate consistently with the Common Transit Convention. The parties also agreed to an intensified process of engagement to resolve all outstanding issues, including the practical solutions necessary for trusted traders such as supermarkets, and on how to classify which goods are at a genuine and substantial risk of entering the EU market. 
  • HM Revenue & Customs has sent a further 250,000 letters and emails to VAT-registered traders urging them to act to avoid disruption to their businesses on 1 January 2021. 
Other Key Developments

– In an interview with the Observer, the outgoing CBI Director General, Carolyn Fairbairn, affirmed that securing a basic deal with the EU should be seen as a “starting point” for a deeper relationship. 

Other Trade Deals

– Canadian PM Justin Trudeau has predicted that a rollover deal with the UK to replace the EU-Canada trade agreement after Brexit will be “straightforward”.

Many thanks for last week’s Brexit transition round-up compiled by public affairs and communications consultant Nicky Donnelly.