LONDON – Britain and the European Union have undergone no breakthrough or breakdown at the moment of another stake or death in their recent Sunday trade talks. But as the negotiations progressed, various glimmers of hope were reflected in the fact that the two sides could finally find a way to bridge the gap between them.
Prime Minister Boris Johnson and European Commission President Ursula von der Leyen have agreed to extend the talks after both described it as a “useful” southern phone call. He dismissed his earlier warning that Britain and the European Union are far apart on key issues.
Mr Johnson voiced more militantly, noting that the shortcomings remained significant and Britain must be prepared to fail to reach an agreement by the 31 December deadline. But even he said the British negotiating partners would not step out of the negotiations and confirmed, ‘We still have a deal to make if our partners want to do it’.
It can be said that neither has set a new deadline for the negotiations, although in practical terms the two parties only have time until New Year’s Eve, when the transitional period for concluding a long-term trade agreement expires. After that, Britain and the European Union will start imposing tariffs on each other’s products.
Mujtaba Rahman, an analyst at Eurasia Group’s political risk management consultant, said: “Today was the moment when everything could have gone wrong – and it hadn’t made a mistake.”
“Both sides are committed to avoiding the cliff, which means the likelihood of an agreement has now increased significantly,” he added.
At the heart of the talks is the thorny question of how the European Union would react if it deviated from the bloc in Britain’s industrial policy. At first, both sides took a hard line: Brussels insisted on being able to protect the single market from unfair competition from British companies receiving state aid; and the British, who declared it a matter of sovereignty to be free to determine their own path.
In recent days, however, the European Union has eased its position, according to people informed of the talks, who have asked for anonymity about the behind-the-scenes talks. Instead of automatically imposing duties to offset the UK divergence, the two sides are discussing other ways of resolving disputes over state aid and other competition policies.
This could allow Mr. Johnson to win, which could help sell the Conservative Party to Brexite. But Britain also made room for important considerations.
In Parliament on Wednesday, before traveling to Brussels for dinner with Mrs von der Leyen, Mr Johnson rejected the European Union’s position as an unacceptable violation of British sovereignty.
Brussels, he said, wanted to ensure that “if a new law is passed in the future that we in this country do not comply with or follow their example, they will have an automatic right to punishment and retaliation.”
It is noteworthy that Mr. Johnson used the word “automatic” because he suggested that the two parties could resolve such disputes in other ways. Prior to that, the British negotiators refused to accept any safeguards against future derogations other than those contained in standard trade agreements, although they undertook not to relax existing labor and environmental standards.
“It seems as if the UK has recognized this principle,” said David Henig, director of the UK’s trade policy project at the Center for European International Political Economy, a research institute. “There is a difference in that there is a difference in principle, and we are trying to find a practical solution that satisfies both sides.”
There were other finer signs of progress. Ms. von der Leyen made her statement after speaking English to Mr Johnson and said, “We both think it is the responsibility at this moment to do the extra mile.” A week after a less hopeful phone conversation, he spoke French and German.
This is not to say that negotiations can still not run aground. Time is short, the two sides still need to work out a politically comprehensive agreement on fishing quotas, and the negative backlash from conservative pro-Brexit lawmakers has yet to convince Johnson to withdraw from approving the difficult details.
“If Ursula is optimistic, that’s great,” Mr. Johnson told Sky News. “But as far as I can see, there are serious and very, very, very difficult issues that are currently separating the UK from the EU.”
Britain said it had made extensive preparations for the failure of the negotiations, after which its trade with the European Union would not meet the conditions of the World Trade Organization. Some analysts have rejected this as they have made a calculated effort to show a tough posture before the next inevitable trade-offs.
Mr Henig, the analyst, said the prime minister had been put under strong pressure from British businesses not to risk a trade war in January over Britain’s theoretical right to take measures it does not currently have plans for.
This point was highlighted on Sunday when Mike Hawes, executive director of the Society of Engine Manufacturers and Dealers, asked negotiators to “finish the job and establish the business we all desperately need without further delay.”
“‘No business,'” he said, “is no less catastrophic for the automotive industry, its workers and their families, and it would be an amazing failure for scaffolding.”
The consequences of the failed negotiations became clear in other ways as well. In recent days, Mr. Johnson has planned a plan for four Royal Navy vessels to prevent French and other foreign vessels from sailing into British fishing waters.
The prospect of a military confrontation between British and French forces on the high seas has provoked alarm and fierce criticism in Britain, even among members of the Conservative Party.
– This is no longer the time of Elizabeth; it is a global Britain, ”Tobias Ellwood, chairman of the House of Commons Defense Committee, told the BBC. “We need to raise the bar much higher than that.”
Between 1992 and 1997, Chris Patten, a former Conservative Party president and Hong Kong governor, accused Johnson of “being on a fugitive train of English exceptionalism”. The prime minister, he added, is “not conservative” in the sense that he is committed to associations, institutions or the rule of law, but an “English nationalist”.
Mr Johnson, for his part, said he would like to negotiate directly with two of Europe’s most powerful leaders, German Chancellor Angela Merkel and French President Emmanuel Macron. But they both refused to contact him, so Ms von der Leyen and her chief negotiator, Michel Barnier, were in control of the negotiations.
This denied Mr Johnson the opportunity to take advantage of the divisions between the 27 Member States of the European Union. Diplomats have revealed Britain’s misconception that could force Brussels to hold back in the final days of the talks.
“What the UK has never understood is that the European Union is a political project,” said Kim Darroch, who was Britain’s Permanent Representative to the European Union and later as ambassador to Washington. “Decisions will be made based on political, not economic considerations.”