Trade negotiations between the UK and the EU took place after Brexit between the United Kingdom and the European Union for a trade agreement to make trade easier than it might have been without such a deal. The deal would cover both tariff and non-tariff barriers to trade. The negotiations formally ended on 24 December 2020 with an agreement approved in principle by the UK Prime Minister (on behalf of the UK) and (on behalf the EU) the President of the European Commission. The result was the EU–UK Trade and Cooperation Agreement (TCA).
Having left the European Union on 31 January 2020 with an eleven-month transition period, the United Kingdom left the European Single Market and European Union Customs Union with effect from 1 January 2021.
During the Brexit negotiations in 2017 (of the withdrawal agreement), the two sides agreed that trade negotiation could only start after the UK's withdrawal, because such negotiations could not happen when the UK still has a veto right within the EU. For this and other reasons, a transition period after Brexit day was defined to allow those negotiations. The transition period started on 1 February 2020, in accordance with the withdrawal agreement. The transition period was scheduled to end on 31 December 2020, a deadline which could have been extended for two years, if requested by 30 June 2020. The British government declared that it would not apply for any such extension, and did not do so. In addition, it declared that the only kind of trade deal the UK is interested in, if any, is a Canadian-style trade deal. A trade deal facilitates EU–UK trade, which accounts for 49% of international UK trade. A Canadian-style trade deal offers the UK a reduction on most custom tariffs between the EU and the UK, but without eliminating VAT, customs and phytosanitary checks. The arrangements for its dominant financial services sector are of particular importance to the UK.
Negotiator teams
For the UK, prime minister Boris Johnson chose career diplomat David Frost as lead negotiator.
On the EU side, the main negotiator was Michel Barnier, who received his negotiating mandate from the European Council on 25 February 2020.
UK trade with the rest of the EU before Brexit The rest of the EU (EU27) was the UK's largest trading partner before Brexit: In 2018, the bloc made up 45% of UK exports and 53% of UK imports. Outside EU, the biggest trading partner of the UK is USA, which in 2018 made up 19% of UK exports and 11% of UK imports.
For the EU27, the UK is its second largest export market (after USA), and third largest import market (after China and USA).
Chronology
In February 2020, the UK government published the UK's approach to the negotiations in a document presented by the prime minister to Parliament titled The Future Relationship with the EU.
The draft EU negotiating position was published on 3 February.
The UK expected to have a Canada-style agreement, while the EU considered proximity and the size of its trade made a Canada-style trade deal dependent on UK adoption of "level playing field" measures.
The European mandate was published on 25 February 2020, while the UK's mandate was published on 27 February 2020.
Ten rounds of negotiations were planned every three weeks, alternately in Brussels and in London.
March 2020 The first official meeting was scheduled for the afternoon of the Monday 2 March 2020. The Guardian anticipated that the 'flash-points' would be "the level playing field' (on workers' rights, environmental protection, product safety standards and state aid), fisheries, dispute resolution, financial services, security and law enforcement, foreign policy and defence, cross-border transport, science and research". In addition, the EU expressed its concern that the UK had not begun any work to implement the Northern Ireland Protocol in the Withdrawal Agreement (a formal treaty) and that UK Government appeared to be backsliding on the obligations it had entered into.
It was expected that the first rounds deals with regulatory standards and fisheries. It is understood that if those points are not agreed by the end of June, both sides will break off negotiations to concentrate on no deal preparedness.
The first round of talks concluded on 5 March 2020. Barnier reported 'grave differences' between the sides, citing in particular the UK's reluctance to commit formally to continued participation in the (non-EU) European Convention on Human Rights as a serious obstacle to security and criminal intelligence cooperation.
The second round, due to take place in mid-March, was postponed due to the 2020 coronavirus pandemic in Europe. Both sides have been exploring alternative ways to continue discussions, including if possible the use of video conferences. On 13 March 2020, the draft of the European Commission's proposals were circulated to national governments for comment; it was then published on 18 March.
In late March, it emerged that negotiations had been abandoned as a result of the coronavirus pandemic, that negotiating via video-conferencing had not proved practicable, and that the British side had failed to table a legal draft that the sides could work on. At the end of March, the UK side declared that it had shared its text, while concerns grew about the realism of a timetable set before the pandemic. It also emerged that the UK had rejected an EU request for a permanent technical office in Belfast, saying that the request would go "beyond what is stipulated in the withdrawal agreement". (Article 12 of the Ireland Protocol states that the UK government is "responsible for implementing and applying the provisions of [EU] law" but EU officials "shall have the right to be present during any activities" relating to checks and controls).
April 2020 In April, against a background of the UK's and member states' preoccupation with managing the rapidly escalating coronavirus emergency, commentators began increasingly to question the practicality of the UK's timetable. Amanda Sloat, a senior fellow at Brookings Institution remarked "In all circumstances it's very difficult to imagine how some sort of large scale trade deal between the U.K. and the EU gets done by the end of the year." Preliminary negotiations resumed on 15 April, limited to agreeing the phasing of subsequent negotiations to end in June 2020. (The deadline for completing negotiations is 30 June 2020). The following day, UK lead negotiator Frost reiterated his Government's position that the end date will not be changed:
A week of full negotiations began on 20 April, by video-conference. The issues to be addressed included the future trade relationship, security policy, trade rules, and the contentious issue of fishing rights. Briefing journalists at the end of the week, Barnier expressed disappointment and frustration at the lack of progress made. In a comment to The Guardian, "a UK spokesman openly questioned the value of the deal being offered by Brussels when compared with a no-deal outcome". According to The Guardian, "there is recognition on both sides of the talks that there is little prospect of agreement on the most contentious issues without a major reset of positions". The Financial Times summarised the week's negotiations as "serv[ing] to underline [...] that the UK and the EU are seeking to negotiate fundamentally different projects".
May 2020 On 13 May, the UK announced that it was moving to establish Border Control Posts at Belfast Harbour, Larne, and Warrenpoint to manage livestock and agrifood products, in accordance with the Northern Ireland Protocol in the withdrawal agreement. The withdrawal agreement specifies that Northern Ireland will continue to follow European single market rules on agricultural and manufactured goods.
On 15 May, the May round of trade negotiations (by video-conferencing) ended in acrimony, with each side blaming the other for lack of progress. While these talks were in progress, responsible Cabinet Minister Michael Gove raised the question of whether an agreement based on quotas and tariffs (like the EUCanada CET Agreement) might be a better option, but EU sources dismissed the idea of agreeing to terms in the time available. On 19 May, the UK Government published its draft text for the deal.
In late May, The Guardian reported that the Fisheries Committee of the European Parliament had "threatened that it would veto any deal that did not include a 'balanced agreement' on fishinq quotas".
June 2020 The early June round of negotiations again ended with 'no significant progress', but the Financial Times reported, "afterwards both sides showed fresh signs of a willingness to compromise to get a deal". The EU side indicated 'flexibility' over the application of its State aid rules, and the UK did likewise over accepting some tariffs.
In late June, German Chancellor Angela Merkel suggested that prospects for mutual compromise were receding and those for a no-deal Brexit were increasing.
The month ended with the expiry of the deadline for the UK to request an extension to the transition period. No such request was made.
July 2020 Face-to-face negotiations beginning 29 June and due to run to 3 July broke up in acrimony on 2 July, with no progress being made. Earlier that week, senior British industrialists warned Prime Minister Johnson of "hugely damaging consequences of a 'no-deal Brexit'".
A further round of negotiations ending on 23 July was again deemed fruitless by both parties, with the prospect of "no deal" deemed increasingly likely but not inevitable.
August 2020 The August round of negotiations ended on 21 August, with "little progress" being made. EU chief negotiator Michel Barnier, noting how little time remained, said that it "seems unlikely" that an agreement can be reached. UK chief negotiator David Frost said that "Agreement is still possible, and it is still our goal, but it is clear that it will not be easy to achieve. Substantive work continues to be necessary across a range of different areas of potential UK-EU future cooperation if we are to deliver it. We have had useful discussions this week but there has been little progress". Barnier questioned Britain's sudden surprise at the impending loss of inter-state (rather than intrastate) cabotage rights for British hauliers, since this is a benefit of the single market that the UK had chosen to leave, and has never been available to third countries.
September 2020 At the beginning of September, the chief negotiators met informally in London to discuss their lack of progress, but there was "no breakthrough". Both sides say that is increasingly unlikely that an agreement can be reached before the deadline. Johnson declared on 7 September that unless an agreement was in place by 15 October, there would be no deal. Barnier had already said (on 26 August) that agreement would have to be reached by 31 October for the Council and both Parliaments to ratify it in time (end December).
The negotiation climate changed when The Financial Times reported on 6 September that the UK government planned to draw up new legislation that would bypass the withdrawal agreement, in particular the Northern Ireland Protocol. The proposed new law would give UK ministers unilateral power to define what state aid needs to be reported to the EU, and define what products they considered at risk of being brought into Ireland from Northern Ireland (the withdrawal agreement states that in the absence of a mutual agreement, all products should be considered at risk). The government defended the move, saying the legislation was compliant with the protocol and merely "clarified" ambiguity in the protocol.