EU-UK Trade Talks Resume Under Brexit Bill Cloud

EU-UK Trade Talks Resume Under Brexit Bill Cloud

The latest round of negotiations scheduled between EU chief negotiator Michel Barnier and his British counterpart David Frost will start in Brussels on Tuesday. There are only two weeks left before a crucial meeting of EU leaders and a month before the final deadline for a deal set by Brussels.

The stakes have never been higher: The pandemic has plunged Britain into the deepest recession of any major developed economy, and a resurgence of coronavirus cases has forced the UK government to discourage workers from using offices and impose new restrictions on pubs and restaurants. The virus is also raging again in large swathes of Europe, with alarming outbreaks underway in France and Spain.

The UK has continued to enjoy free access to EU countries (and vice versa) since Brexit in January thanks to transitional arrangements that expire on December 31. The country now urgently needs a deal with Brussels if UK businesses are to avoid higher transaction costs. and other obstacles.But so far, talks have failed to break through two key sticking points: fishing rights and rules on government aid to businesses.Hopes for a deal were all but dashed earlier this month when British Prime Minister Boris Johnson launched a showdown with Brussels saying he intended to break the terms of the divorce deal that has settled the departure from the country of the European Union.

The idea that the UK would intentionally break international law has sparked political controversy in his country and has been strongly condemned in European capitals. But the outcry was quickly eclipsed by an alarming rise in the number of new coronavirus cases in Britain.

New restrictions aimed at controlling a second wave went into effect in the country last week. Pubs and restaurants are under additional financial pressure after being restricted to table service and ordered to close at 10 p.m. Workers are advised to avoid the office if they can, limiting spending in downtown areas. With the government set to withdraw wage support from workers next month, Britain’s fragile economic recovery could be stifled.

British companies cut nearly 700,000 jobs between March and August. The Bank of England warned in August that 2.5 million people could be out of work and looking for work by the end of the year.

Mujtaba Rahman, managing director for Europe at Eurasia Group, believes coronavirus outbreak has Johnson re-thinking the risks of Britain collapsing from its biggest export market without a deal to protect trade . Rahman now sees a 60% chance of a deal being done before the end of the year.

“The worsening of Boris Johnson’s issues with the coronavirus, with increased infections, new nationwide restrictions and a looming unemployment crisis has led ministers to conclude that he will now need the political success of an agreement with the EU, ”he wrote in a research note last week.

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