Brexit: Are Trade Negotiations Deadlocked Or Just Dead?

• Published date: 27 October 2020
• Subject Matter: Government, Public Sector, International Law, Constitutional & Administrative Law, International Trade & Investment
• Law Firm: Shepherd and Wedderburn LLP
• Author: Mr Alison Rochester and Roddy Forgie

Despite our prediction of an eventful few months, there has been little progress in the Brexit trade deal negotiations since our last bulletin. There has been no breakthrough on the key issues: competition, fisheries and governance. Negotiations between the UK and the EU were temporarily paused because of a lack of progress.

However, the UK Government agreed to resume talks after the EU's chief negotiator, Michel Barnier said "compromises on both sides" were needed. While negotiations began again on 22 October, the UK Government has indicated there is every possibility a deal will not be reached because significant areas of disagreement remain with the EU.

The UK Government has stated that the country should still be prepared to trade with the EU on a no-deal basis. This means the UK could expect a more limited relationship with the EU, which may resemble that of Australia and involve defaulting to World Trade Organisation rules. The Prime Minister insists this would be a good outcome.

Business organisations have increased pressure on the UK Government to reach a deal, claiming this is crucial for a post-COVID economic recovery. The UK has said that the door is "still ajar" but the EU must speed up negotiations and offer better "Canada-like" terms. The EU says it is committed to reaching an agreement, but not at any cost.

One recent key development has been the UK Internal Market Bill. This was put to Parliament in late September and includes provisions to override parts of the divorce agreement agreed and signed by the UK and EU last year. The UK has described the Bill as a safety net to protect the UK's integrity. However, the EU has raised legal proceedings, claiming the Bill...