The EU and the U.K. on Monday set out their priorities for the post-Brexit future relationship talks — buckle up for a bumpy ride.
The EU is willing to negotiate a highly ambitious trade deal, the bloc's chief negotiator Michel Barnier said in Brussels, but "this exceptional offer is conditional." Those conditions are not to the liking of Boris Johnson though, who used a speech in London to set out his own Brexit negotiating stance.
Here are five potential clashes in the upcoming talks.
1. Playing by the rules
The central area of dispute is around so-called level playing field rules. The EU is worried the U.K. might lower labor and environmental standards and boost state aid to its companies, effectively becoming a competitor with an unfair advantage.
Barnier said it is up to the U.K. to answer the “fundamental” question of the future relationship: “Will it continue to adhere to the EU’s social and regulatory model?” According to Barnier, the U.K.'s answer "will be fundamental to the level of ambition of our future relationship.”
"The Government will not agree to measures in these areas which go beyond those typically included in a comprehensive free-trade agreement." — Boris Johnson
But Johnson said in his speech on Monday that "there is no need for a free-trade agreement to involve accepting EU rules on competition policy, subsidies, social protection, the environment, or anything similar, any more than the EU should be obliged to accept U.K. rules."
He said the U.K. would maintain or even improve upon EU standards, but insisted that signing up to a treaty that mandated such alignment or copying EU laws was not an option.
However, a spokesman for the prime minister later indicated how the issue could be resolved. He suggested that level playing field safeguards could be included in the trade deal, as is the case in the bloc's trade deal with Canada, but that the U.K. would go no further. In a statement setting out the U.K. negotiating position, Johnson said, "The Government will not agree to measures in these areas which go beyond those typically included in a comprehensive free-trade agreement."
2. Troubled water
Europe's fishing sector is making a big splash in Brexit negotiations. Barnier said the EU wanted "continued, reciprocal access to markets and to waters with stable quota shares." The EU's draft negotiating mandate clearly links this to the overall free-trade agreement.
Johnson has long insisted Britain must become an independent coastal state. In his speech on Monday he said the government was "ready to consider an agreement on fisheries," but added, "Under such an agreement, there would be annual negotiations with the EU, using the latest scientific data, ensuring that British fishing grounds are first and foremost for British boats."
The British negotiating mandate notes that, just like Norway, Iceland and the Faroe Islands, it wants yearly talks about how much fish can be taken out of the water and where.
3. Final say
Governance looks set to be another point of contention. Barnier said the Court of Justice of the European Union (CJEU) must be able to "continue its role in full" over areas of the future relationship that are "based on concepts derived from European law," as well as in matters of security.
But Johnson in his written statement said a deal with the EU cannot include "any jurisdiction for the CJEU over the U.K.’s laws." It is unclear at the moment exactly what that means. According to the Political Declaration — the text on the future relationship that accompanied the legally binding Withdrawal Agreement — the CJEU would be able to rule on legal interpretations of EU law. But Barnier suggested its reach could go deeper than that. He specifically mentioned a role for the CJEU in the security aspect of any deal, which could be a flashpoint in the talks on a topic that the two sides otherwise broadly agree on.
4. Gibraltar's future
A further row looks set to take place over the status of Gibraltar. Barnier said that the territory will not be included in the negotiations, and that Spain would have to give the green light to any deal that covered the island. "The kingdom of Spain will have to be involved and give its agreement to a specific agreement on Gibraltar," he said.
Johnson insists he does not want an extension beyond December 31. Barnier said on Monday that the timing is “Johnson’s choice.”
But Johnson said that the U.K. "will be negotiating on behalf of the entire U.K. family," including Gibraltar.
5. Time limit
The EU has repeatedly warned the U.K. that the time left until the end of the transition period is not long enough to reach a comprehensive deal. However, Johnson insists he does not want an extension beyond December 31. Barnier said on Monday that the timing is “Johnson’s choice.” Expect more discussion on a potential extension throughout the first half of the year.
The EU also has its own timing issue. A timeline presented to reporters on Monday says the EU aims to wrap up negotiations by the mid-October European Council summit — and Brussels is optimistic that the two-and-a-half months between then and the end of the year will be sufficient to ratify the future agreement, without having to involve national parliaments.
But that’s walking on thin ice. If not all parts of the deal are of exclusive EU competence, then member countries could demand that their national parliaments must have a say, potentially scuppering any deal.
