Is there still time for a Brexit trade deal?

This week the last scheduled talks were held between EU and UK negotiators on a Brexit trade and security deal. Only 90 days remain until the end of the transition period, when Britain will leave the EU’s economic system, deal or no deal.

What happens now?

The European commission president, Ursula von der Leyen, will speak to Boris Johnson on Saturday afternoon as both sides seek common ground on the way forward. The conversation would not happen if a deal was impossible. But that doesn’t mean a deal is inevitable. Far from it. After updating EU leaders on Friday, Von der Leyen said there had been “progress on many, many different fields” but the most difficult questions were “still completely open”.

If those questions are not resolved by an EU summit on 15-16 October, the window for an agreement will be closing rapidly.

What are the talks stuck on?

The biggest problem, as expected from the start, is the “level playing field” – rules to ensure fair competition between British and EU companies. Brussels says its unprecedented offer of a zero-tariff trade deal, with no quantity limits on UK imports to the bloc, means abiding by EU standards on environment, worker and consumer rights and – most contentious of all – state support for companies.

Agreement on the 100 categories of fish swimming in EU-UK waters remains tenuous. While no one expects a deal to be stymied by fishing, the two sides remain far apart. EU member states such as France, the Netherlands and Belgium that stand to see economic pain inflicted on their fishing fleets will have to judge the final compromise acceptable.

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The final nagging problem is a dispute settlement system to underpin the entire post-Brexit agreement. Following the British government’s announcement that it was ready to violate the Brexit withdrawal treaty, EU officials say a solid legal process to resolve future disputes is more important than ever.

The UK has resisted the EU’s main demands on all these issues, despite signs that Brussels is willing to compromise on state aid and fish. It remains unclear whether the two sides can find a middle way.

What does EU legal action mean?

As talks grind on, the European commission has begun legal action over the internal market bill, which includes clauses that override the withdrawal agreement that the prime minister signed last year. The government has admitted the bill breaks international law but argues that it needs a “safety net” to protect the UK internal market.

For now, legal action and Brexit talks are on separate tracks. The EU hopes the prospect of a zero-tariff trade deal will allay lingering British concerns about the Irish protocol, leading the government to drop the offending provisions. But the government has been put on notice that it cannot get a trade deal if this “loaded gun” remains on the table. “Let there be no mistake, there is no deal with any of these threats pending,” one EU official said.

Can a deal still be done in time?

For now the task is political rather than technical. Both sides think a deal is in grasp if the other side climbs down.

For the EU, the big question mark is whether Boris Johnson wants a deal or will follow the lead of his close advisers Dominic Cummings and David Frost, who are perceived in Brussels to be more comfortable with no deal. “My feeling is that he [Boris Johnson] is not a real ideologue; it’s not impossible [to get a deal],” said one senior EU diplomat.

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But the task will soon become technical. While there are nearly three months before the transition period expires, the EU says the ultimate deadline is late October, although this could stretch into the first half of November. In the final six weeks of the year the 1,000-plus-page treaty – yet to be agreed – has to be finessed by lawyers, translated into all 24 EU languages, inspected by 27 EU governments (and some of their legislatures), then ratified by the UK and European parliaments.

What are the chances of a deal?

As finely balanced as the original Brexit vote itself: hovering around 50/50. Big political choices are yet to be made. Nor can the chances of the two sides arguing themselves out of time be ruled out.



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