Negotiators representing the European Union and the United Kingdom warned on Friday that they may not be able to ink a detailed deal regarding various trade details for the U.K.’s withdrawal from the EU. Media reports point to a strained week of negotiations with little progress.
EU chief negotiator Michel Barnier bluntly warned on Friday that at this stage, an agreement seems unlikely.
Reportedly the two-sides are bogged down in several areas including fishing rights and rules designed to regulate the U.K. undercutting the EU’s economy.
The implication at this point is that if the two sides cannot come to a comprehensive set of agreements by mid-October, when senior EU leaders are scheduled to meet, supply chains and consumers could likely face the return of tariffs and quotas regarding the movement of goods.
According to a published Bloomberg report, U.K. negotiators tried to unlock the deadlock by submitting a confidential draft of a final deal in an attempt to assess where differences remain. Chief EU negotiator Barnier indicated that while the document was useful, it represented more of a unilateral approach.
Both sides are expected to resume talks in London on the week of September 7.
What it Means
There is little secret that Prime Minister Boris Johnson’s government has taken a hardline stance on the terms related to the country’s exit from the EU. Last week will likely be cited as the significant warning that EU trade negotiators are going to take a hard line as-well.
With the economic implications of the ongoing COVID-19 pandemic on both economies, the timing of a non-agreement does not bode well in terms of the flow of goods, especially for many U.K. based supply chains. Especially at-stake are the economic factors related to aerospace, automotive and high tech component supply networks.
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