Brexit negotiators in tense stand-off, dashing hope of swift deal

Informal meetings between Britain and EU's chief negotiators since then have failed to make progress. PHOTO: REUTERS

LONDON (BLOOMBERG) - When Prime Minister Boris Johnson held a video conference with the leaders of the European Union last month, officials on both sides came away optimistic that a deal on their post-Brexit relationship was in sight. That confidence is evaporating.

Informal meetings between Britain and EU's chief negotiators since then have failed to make progress, according to people with knowledge of the discussions. Privately, EU officials say their attempts to compromise haven't been reciprocated, while their British counterparts retort that the bloc's concessions haven't gone far enough.

With time to reach an agreement running out, the pressure is building on David Frost and the EU's Michel Barnier as they begin their first full round of negotiations for six weeks with a dinner in London on Monday (July 20).

If the two sides fail to reach an agreement, tariffs and quotas will be re-imposed when Britain parts ways with the bloc at the year-end.

Johnson's video call - in which he signalled to the EU he was ready to do a deal - was supposed to encourage the technicians to work toward an agreement at speed. Both sides say the chances of a deal being reached by the end of August are fading fast.

In recent weeks, Frost and Barnier have held a series of meetings and dinner discussions. While that has helped to dissipate some of the acrimony between the two that was beginning to creep into their virtual exchanges since May, it has done little to build on the broad landing zone that had already been sketched out.

Barnier had signalled the EU is ready to give ground on the three most contentious topics in the negotiations: EU boats' access to British fishing waters; how closely Britain will stay aligned to European rules on state aid; and what role the European Court of Justice will play in policing the pact.

The EU side is baffled Britain hasn't shown any indication of where it is willing to compromise, one official said, adding that recent talks have just gone over old ground.

Part of Britain's lack of movement can be explained by it believing it has the upper hand. Not only does Johnson appear comfortable with cutting ties with the EU without an agreement, British officials argue that in many areas - on fisheries, for example - European countries will eventually believe it is better to swallow Britain's hard-line position because they would be even worse off than in the event of no deal being reached.

If the two sides can bridge their differences in the three key areas of disagreement, though, both sides acknowledge that an agreement could be ready within weeks - meaning a deal could still be reached by the EU's October deadline.

The week's talks, which conclude at Thursday lunchtime (July 23), will also cover areas from energy to security co-operation. A final negotiating round is scheduled for the week of Aug 17 - but no plans have been made for after that.

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