The penultimate round of negotiations on the terms of future UK-EU relations began in London on Tuesday. Amid fears about their possible failure, the composite index of the 600 largest European companies Euro Stoxx 600 lost 1.2% on Tuesday, while the FTSE 100 index of the London Stock Exchange fell 0.1%.
In the coming days, delegations will make another attempt to bring their positions closer together and reach a consensus on the outstanding issues before the time allotted is finally over. On the eve of the current round, the Prime Minister of the United Kingdom Boris Johnson warned that the negotiations should be completed by the EU summit on October 15, so that the parties can approve the agreement. According to Johnson, if they fail to agree on free trade rules before then, the parties will have to вЂњaccept it and move on.вЂќ At the same time, he expressed confidence that it is still possible to reach an agreement.
The penultimate round of negotiations is complicated by the fact that the British government has confirmed plans to introduce a law on the internal market, the entry into force of which will violate one of the main points of the Brexit deal вЂ” the section on securing the status of Northern Ireland as an entity that is part of the customs space of the United Kingdom while maintaining access to the single market and the EU customs zone. The government says that this instrument is the only insurance against the failure of negotiations with the EU, and its goal is to ensure free trade between all the constituent parts of the United Kingdom, regardless of whether London and Brussels can reach an agreement. In Brussels, London's plans were extremely negatively perceived, and Irish Foreign Minister Simon Coveney said that the EU should not вЂњindulge the approachвЂќ of the British government, which implies a violation of international law.
Before the meetings, which began on Wednesday, the heads of the delegations вЂ” the representative of the British Prime Minister David Frost and the chief EU negotiator Michelle Barnier вЂ” announced that they intend to defend the positions of their parties to the last. Frost said the stumbling blocks in discussions with the EU remain the issue of ensuring conditions for equal competition for British and European companies (the so-called uniform rules of the game), as well as the rules of fishing. Barnier, on the other hand, accused London of trying to get most of the benefits of EU membership, but without any obligations and restrictions within the framework of compliance with the EU's common trade policy with third countries.
The UK left the EU on the night of February 1, 2020, after three years of negotiations on the terms of the exit. Brussels and London have agreed on a transitional period until the end of this year, during which all European regulations apply to the United Kingdom. The British side refused to extend the transition period.
For the remaining time, London and Brussels must agree on a document on the procedure for building future relations. If the agreement, which will stipulate new rules of trade, fails to be concluded, the parties will begin to trade under the WTO rules as soon as the transition period ends.
The current round, the eighth in a row, is expected to last until September 10. The final round of discussions is scheduled for September 28 вЂ“ October 2, it should take place in Brussels.