Richard North, 20/10/2020  

Michel Barnier, as expected, was on the phone to David Frost yesterday, confirming that the EU "remains available to intensify talks in London this week, on all subjects, and based on legal texts".

Officially, Barnier now awaits the UK's reaction to what Michael Gove called a "constructive move on the part of the European Union", which he then welcomed.

Obviously, said Gove during yesterday's statement to the Commons, "we need to make sure that we work on the basis of the proposed intensification that it proposes", adding: "I prefer to look forward in optimism rather than necessarily to look back in anger".

Clearly – or so it would appear – Gove didn't get the memo. According to the Guardian, and other newspapers such as The Daily Mirror, Downing Street has refused to restart the negotiations, the No 10 spokesman insisting that there remained nothing yet, on which to base the resumption.

In full, the spokesman said: "This was a constructive discussion. The UK has noted the EU's proposal to genuinely intensify talks, which is what would be expected at this stage in a negotiation. However, the UK continues to believe there is no basis to resume talks unless there is a fundamental change of approach from the EU".

He continued: "This means an EU approach consistent with trying to find an agreement between sovereign equals and with acceptance that movement needs to come from the EU side as well as the UK. The two teams agreed to remain in close touch".

These sentiments were effectively repeated by David Frost in a – presumably coordinated – tweet, acknowledging that he had a "constructive discussion" with Barnier. He "noted his proposal to intensify work, as we have been asking. But the EU still needs to make a fundamental change in approach to the talks and make clear it has done so. We will stay in close touch".

What we are short of, however, is what precisely the UK government means by "fundamental change", the nature of which could mean expecting of the EU things it simply cannot give.

In any event, we are told that government's final response has caused some "bemusement in Brussels", with suggestions that this is motivated by the inability of Downing Street to reverse Johnson's suspension of the talks so quickly.

Gove himself was not without complaints about what he quite obviously felt was the EU's unreasonable behaviour. We have been clear since the summer that we saw 15 October as the target date for reaching an agreement with the EU, he said.

The Prime Minister and the Commission President Ursula von der Leyen agreed on 3 October that our negotiating team should work intensively to bridge the remaining gaps between us, and we made clear that we were willing to talk every day.

But, he said, "I have to report to the House that this intensification was not forthcoming. The EU was willing to conduct negotiations only on fewer than half the days available and would not engage on all of the outstanding issues".

Moreover, he complained, "the EU refused to discuss legal texts in any area, as it has done since the summer. Indeed, it is almost incredible to our negotiators that we have reached this point in the negotiations without any common legal texts of any kind".

Earlier, at the beginning of his statement, Gove had said that "we [the government] had hoped to conclude a Canada-style free trade agreement before the transition period ends on 31 December this year", adding that "We remain absolutely committed to securing a Canada-style FTA, but there does need to be a fundamental change in approach from the EU if the process is to get back on track".

And here it gets really obscure. It was in March of this year that the UK and EU exchanged agreement drafts, with the UK publishing its working text and annexes on 19 May.

We can assume that they were discussed because Gove says that the EU has refused to discuss legal texts in any area "since the summer", which suggests that they were discussed earlier.

In a letter to Barnier from David Frost of the 19 May, Frost asserted that "our draft FTA approximates very closely those the EU has agreed with Canada or Japan". Our aviation proposals, he claimed, "are similar to those the EU has agreed with other third countries".

However, when it comes to CETA and the broader EU-Canada agreements, there are very significant differences between them and the UK draft.

For instance, on the crucial issue of competition policy, the UK offers the equivalent of less than one A4 page, the CETA text cross-refers to the EU-Canada agreement on the application of their competition laws, which runs to an additional 12 pages.

Thus, the two agreements must be read together, to make the whole. Yet, the UK has offered no equivalent text, which means that there is very little in common between the two offerings.

In other respects, as I pointed out yesterday with the aviation proposals, there are important conceptual differences. By and large, in terms of product regulation, the EU looks to establishing equivalence, on a case-by-case basis, while the UK is looking for "reciprocal acceptance", which is a very different thing.

Now that the EU has agreed to negotiate on the basis of legal texts, one must assume that the published drafts will be back on the table. But, as they stand, there are many areas which could not under any circumstances, be acceptable to the EU.

On the other hand, if in expecting a "fundamental change of approach from the EU", the UK is expecting these drafts to be accepted, it is going to be seriously disappointed.

What we really need of this process, therefore, is for the UK to come clean and admit to the extent of the divergence between its proposals and a Canada-style free trade agreement that Gove says the government wants to conclude.

This, of course, is not going to happen, which leaves the UK effectively demanding access to the EU's Single Market on its own terms. But, as Barnier reminded us on 21 September 2017 – the day before Theresa May's Florence speech - it is not – and will not – be possible for a third country to have the same benefits as the Norwegian model but the limited obligations of the Canadian model.

And naturally, he said, " any agreement must respect the regulatory autonomy of the EU, as well as the integrity of its legal order". Since this essential requirement is not fulfilled, the chances of any agreement look increasingly slender.

Also published on Turbulent Times.

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