January 28, 2020

The Five Big Flashpoints in Boris Johnson’s Battle With Brussels
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. When the U.K. rescued Flybe two weeks ago, alarm bells rang not only at the regional airline’s rivals but also atop the European Union.One of the EU’s biggest roles is limiting the subsidies member states can give companies to prevent them getting an unfair advantage over competitors. After Brexit, the EU wants the U.K. to go on playing by these rules. Flybe showed the British may not be so keen.That’s just one potential flashpoint as the EU and U.K. prepare to negotiate a landmark trade deal this year. For Europe, the trade-off is clear: The further Britain strays from the bloc’s rulebook, the more its access to the single market will be curtailed. This is essential to avoid undercutting the bloc’s economy. For Prime Minister Boris Johnson, Brussels’s price for a deal may be too onerous.The European Commission, which will negotiate on behalf of the 27 remaining national governments, will on Wednesday ask them for a mandate setting out the details of the broad accord that the bloc wants to strike with the U.K. Member states plan to give their green light on Feb. 25, paving the way for the first round of talks at the start of March.That will trigger 10 months of tricky negotiations, with potential clashes everywhere you look. Here are five:Keeping Close or Moving Away?The EU insists on a level playing field, meaning that it wants the U.K. to stick to the same rules on tax, state aid, workers’ rights, and environmental protection as it did when it was a member. The U.K. doesn’t want to, as the whole point of leaving the EU in the first place was to break away from the diktat of Brussels.“There will not be alignment, we will not be a rule-taker,” Chancellor of the Exchequer Sajid Javid told the Financial Times this month.This quarrel is likely to hang over the entire negotiation. The EU wants both over-arching level playing field commitments as well as sector-specific ones. It says it’s ready to give the U.K. a free-trade deal without tariffs and quotas, and one that’s as least as comprehensive as its agreement with Canada, but Britain’s size and proximity means the bloc wants greater safeguards than in previous agreements.But how negotiators square the EU’s demand for alignment with the U.K.’s desire to leave the clutches of Brussels rule-making isn’t immediately apparent.Fish Versus Finance“You may have to make concessions in areas like fishing in order to get concessions from us in areas like financial services,” Irish Prime Minister Leo Varadkar told the BBC this week.These are the two big bargaining chips. The U.K. wants to take back control of its waters, but knows France and Spain are desperate to go on fishing them; the EU thinks Britain wants its financial services industry to have as extensive a level of access to its single market as possible. In the Brexit divorce agreement, the two sides set themselves a June deadline to reach a deal on both.It’s why the EU is determined to negotiate simultaneously on as many of the matters in the future relationship as possible: It thinks it holds most of the cards -- as long as it can play them all in one go.“All this needs to be coordinated so that we maximize our negotiating leverage, because that is what each side tries to do in a negotiation,” Sabine Weyand, the commission’s director general for trade, said on Dec. 17.Geopolitical CloutThe U.K. has potential leverage in other areas, such as defense. Britain has nuclear weapons, Europe’s biggest defense budget, a permanent seat on the United Nations Security Council, and an extensive intelligence network. All these make the country a key partner for the EU. Even as they argue about other things, both sides will want to continue co-operating on sanctions policy and combating terrorism.But the EU is wary about giving the U.K. access to some of its most sensitive data. That includes the Schengen Information System which police and border guards (including at the moment, those in the U.K.) use to check the whereabouts of suspicious people.With Britain and the EU sharing similar objectives, this shouldn’t become the biggest sticking point. But that’s exactly what many people said about the Irish border before the first set of negotiations. And remember how that turned out.Who’s In Charge?Central to any agreement will be how it is governed. Breaking away from the European Court of Justice was a key plank of the pro-Brexit campaign, yet the EU insists that only the ECJ can arbitrate on anything that relates its own laws -- in particular how any level playing field commitments are applied.If the British government hands out state aid, will the European Commission continue to have a say over whether it is lawful? Can London view a European court as a disinterested referee?This isn’t the most obvious bone of contention, but the issue wasn’t fully addressed in the U.K.’s withdrawal agreement and could return to haunt negotiators.EU UnityAside from the obvious U.K.-EU tensions, it’s possible that the remaining EU member states won’t always see eye-to-eye on what their common position should be. Will governments that have no interest in fishing in British waters jeopardize a trade deal that would greatly benefit their economies?The transition period following Britain’s exit from the EU is due to expire at the end of this year, making a new EU-U.K. trade accord essential to avoid an economically disruptive separation.The British have already signaled they will try to exploit any splits among EU members. They tried to do so during the withdrawal negotiations to little effect; but, with different countries having different priorities across the bloc, they hope that, this time, the strategy could prove to be a little more fruitful.\--With assistance from Samuel Dodge.To contact the reporters on this story: Ian Wishart in Brussels at iwishart@bloomberg.net;Jonathan Stearns in Brussels at jstearns2@bloomberg.netTo contact the editors responsible for this story: Ben Sills at bsills@bloomberg.net, Edward EvansFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Related Stories
Latest News
Top news around the world
Coronavirus Disease

Coronavirus disease (COVID-19) is an infectious disease caused by a newly discovered coronavirus.

Most people infected with the COVID-19 virus will experience mild to moderate respiratory illness and recover without requiring special treatment. Older people, and those with underlying medical problems like cardiovascular disease, diabetes, chronic respiratory disease, and cancer are more likely to develop serious illness.

Around the World

Celebrity News

> Latest News in Media

Watch It
Rep. Alexandria Ocasio-Cortez IDs 'Keys to Castle' for Real Police Reform
July 06, 2020
oLHjH9BFsIw
Beverly Hills 4th of July Party a Breeding Ground for Coronavirus
July 05, 2020
jHPVAU82grw
Parade of Trucks with Trump, Confederate Flags Blaze Down L.A. Streets | TMZ
July 04, 2020
e9t3VLZ9-2w
Kanye West Announces Presidential Run | E! News
July 05, 2020
3LvC9OKO_P4
Jada's Affair?, Charlize Ther-Wrong Name & Housewives Hitman - "Nightly Pop" 07/02/20 | E! News
July 02, 2020
ZcwG2INSVRI
Chance's Relationship Fail, $1K Haircut & Jen's Advice - "Nightly Pop" 07/02/20 | E! News
July 03, 2020
mPSzAABN4yI
Can Lea Michele’s ‘mean girl’ behavior be forgiven? | Page Six Celebrity News
July 03, 2020
Sp-hyaacIB0
Will the 'Ellen DeGeneres Show' be canceled? | Page Six Celebrity News
July 01, 2020
w6fF_hmLmw4
Heather Rae Young reveals first impression of boyfriend Tarek El Moussa | Page Six Celebrity News
July 06, 2020
zB6PN6htngQ
'Succession' Composer Nicholas Britell on How He Crafted the Music of Season 2
July 03, 2020
xgJUmZgGHUI
Kieran Culkin & Dan Levy - Actors on Actors - Full Conversation
July 03, 2020
x1U65peRmGo
Emmys 2020: Issa Rae, Linda Cardellini Among Possible Contenders for Lead Comedy Actress
July 03, 2020
DnMulYkHAGs
TV Schedule
Late Night Show
Watch the latest shows of U.S. top comedians

Sports

Latest sport results, news, videos, interviews and comments
Latest Events
06
Jul
ENGLAND: Premier League
Tottenham Hotspur - Everton
06
Jul
SPAIN: La Liga
Sevilla - Eibar
06
Jul
SPAIN: La Liga
Levante - Real Sociedad
05
Jul
ITALY: Serie A
Napoli - Roma
05
Jul
SPAIN: La Liga
Villarreal - Barcelona
05
Jul
ENGLAND: Premier League
Southampton - Manchester City
05
Jul
ENGLAND: Premier League
Liverpool - Aston Villa
05
Jul
ITALY: Serie A
Inter Milan - Bologna
05
Jul
SPAIN: La Liga
Athletic Bilbao - Real Madrid
05
Jul
ITALY: Serie A
Brescia - Verona
05
Jul
ITALY: Serie A
Udinese - Genoa
05
Jul
ITALY: Serie A
Sampdoria - Spal
05
Jul
ITALY: Serie A
Parma - Fiorentina
05
Jul
ITALY: Serie A
Cagliari - Atalanta
05
Jul
SPAIN: La Liga
Osasuna - Getafe
04
Jul
ENGLAND: Premier League
Chelsea - Watford
04
Jul
ENGLAND: Premier League
Wolves - Arsenal
04
Jul
ITALY: Serie A
Lazio - AC Milan
04
Jul
ENGLAND: Premier League
Manchester United - Bournemouth
04
Jul
ITALY: Serie A
Juventus - Torino
03
Jul
SPAIN: La Liga
Atletico Madrid - Mallorca
02
Jul
ENGLAND: Premier League
Manchester City - Liverpool
02
Jul
ENGLAND: Premier League
Sheffield United - Tottenham Hotspur
02
Jul
ITALY: Serie A
Roma - Udinese
02
Jul
SPAIN: La Liga
Real Madrid - Getafe
02
Jul
ITALY: Serie A
Atalanta - Napoli
01
Jul
ITALY: Serie A
Spal - AC Milan
01
Jul
ENGLAND: Premier League
West Ham United - Chelsea
01
Jul
ENGLAND: Premier League
Arsenal - Norwich City
01
Jul
ITALY: Serie A
Inter Milan - Brescia
30
Jun
SPAIN: La Liga
Barcelona - Atletico Madrid
30
Jun
ENGLAND: Premier League
Brighton - Manchester United
30
Jun
ITALY: Serie A
Genoa - Juventus
28
Jun
ITALY: Serie A
AC Milan - Roma
28
Jun
ITALY: Serie A
Parma - Inter Milan
28
Jun
SPAIN: La Liga
Espanyol - Real Madrid
28
Jun
ITALY: Serie A
Napoli - Spal
Find us on Instagram
at @feedimo to stay up to date with the latest.
Featured Video You Might Like
0vmRhiLHE2U JFCZUoa6MYE UfN5PCF5EUo 2PV55f3-UAg W3y9zuI_F64 -7qCxIccihU pQ9gcOoH9R8 g5MRDEXRk4k tudKp5Vhs3k iwWHibhssSo kQr0XHPbICM 5NeCb7JxaRk
Copyright © 2020 Feedimo. All Rights Reserved.