Boris Johnson and Ursula Von der Leyen have decided that the abyss can still wait. The British Prime Minister and the President of the European Commission held a new telephone conversation this Sunday mid-morning to address the negotiations of the post-Brexit trade agreement. Despite the fact that both set a deadline for the end of this week to make a final decision, they have agreed to give the negotiating effort one last chance. A joint statement (as opposed to their last meeting) and a slightly more optimistic tone to say that they are willing to go “the extra mile” necessary to try to close a deal: “We had a useful conversation this morning, in which we discussed the main unresolved issues. Our negotiating teams have worked around the clock for the past few days. Despite being exhausted after almost a year of negotiation, and despite the fact that time and time again we have missed deadlines, we believe that the responsible thing at this point is to go the extra mile. We have agreed to order negotiators to continue talking to explore whether, even at this late stage, it is possible to reach an agreement. “
Johnson and Von der Leyen had announced last Wednesday that it would be this Sunday when it would finally be decided whether it was worth continuing to negotiate to avoid a wild Brexit. The temporary white smoke sends a signal of relief to the hundreds of companies that depend on and feed the commercial relations between the EU and the United Kingdom, estimated at more than 700,000 million euros a year.
The president of the Commission and the British Prime Minister have analyzed by telephone the three points that prevent the negotiations from being completed: the rules on competition, the arbitration mechanisms in case of dispute and the access of the European fishing fleet to British waters. And although they have not yet found a definitive solution, the fact that they are prolonging the contacts indicates that, at least, they see a way of understanding.
324 days after the United Kingdom and the EU signed a Withdrawal Agreement that legally ratified the will of the British to leave the community club, the Government of Boris Johnson has found that it is easier to slam the door than to call back to the door to mend the relationship. 2020 has been the year of the transition period. During this time, Brexit was already a legal reality (since January 24), but without practical consequences. The freedom of movement of people, goods and services between the island and the mainland was maintained, and the internal market was still in force. The negotiating teams of both parties, led by Michel Barnier (EU) and David Frost (UK), began to work on a future trade agreement that would allow an orderly end of the relationship, starting on January 1, 2021.
No one was counting on a global pandemic, which paralyzed the talks for months and affected individual members of both teams. Despite the delay, the willingness of Brussels and London to push forward the work gave a renewed effort to the task from the second half of the year. Neither companies nor financial markets, focused on weathering the huge crisis caused by the coronavirus, contemplated the possibility of a hard Brexit. There were complicated pitfalls in the negotiations, they supposed, but the statements from Downing Street or the European Commission were simply part of a negotiating process riddled with spills, false threats and pure strategy.
The movements of the last days had been a jug of cold water for all the passive spectators of this long process. Johnson and Von der Leyen were meeting for dinner last Wednesday in Brussels to try to untangle with a political response the Gordian knot that had become completely stagnant negotiations. It was a “frank” meeting (which in diplomatic language means “dog-face”) that did not solve anything and that transmitted a very pessimistic message to markets and companies.
“The probability that there will be no agreement is higher than that of an agreement,” summarized Von der Leyen this Friday at the press conference after the European Council. “I think it is very, very clear at the moment that the highest possibility is to have a relationship with the European Union more to the Australian than to the Canadian,” said Johnson that same day in London, resorting to one of the euphemisms geographical areas to camouflage the danger of a disorderly Brexit accompanied by tariffs and quotas on trade.
The tension prior to the rupture could be verified when the German Chancellor, Angela Merkel, and the French President, Emmanuel Macron, agreed that they would not respond to the prime minister’s phone calls, with which he intended to break the unity of the community bloc and achieve bilateral a post-Brexit deal in extremis. The phone slam, according to a European source, was agreed in a videoconference last Monday, in which Merkel, Macron, the president of the European Council, Charles Michel, and the president of the European Commission, Ursula von der Leyen participated. Attempting to ignore the sit-in, Johnson continued to proclaim his intention to knock on all doors on Thursday. For him, he tried to show, he was not going to stay: “I will go to Brussels, to Paris, to Berlin, anywhere, to try [el acuerdo] and bring it home ”.
The negotiating teams have held their meetings over the weekend, to try to find a solution to the two main obstacles: access to British territorial waters for EU fishing companies and the obligation that the United Kingdom submit to a rules of fair competition in labor, environmental, consumer protection or public aid to companies, in exchange for a relationship without tariffs or quotas. The Johnson government upholds a supposed sovereignty that it claims Brussels wants to undermine by forcing the British to submit to all future trade laws passed by the EU. Von der Leyen already clarified this week that no one forces London to abide by new rules or regulations, but that if not, the terms of a hypothetical agreement should simply be readjusted.
The European Commission finally decided this week to make public its emergency plans for a hard Brexit, which mainly affect fishing, air navigation or the cabotage rights of transport companies [libertad de carga o descarga por el territorio comunitario]. It was a sign that the negotiations had deteriorated to the point that there was no going back and that was how the markets interpreted it. This Friday they were stained red, not only in Europe but also in the US The British pound saw its price fall against the dollar by 1.5% throughout the week.