What’s happening in post-Brexit trade talks?

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Post-Brexit relations between the United Kingdom and the European Union are very similar to last year's Brexit withdrawal agreement negotiations.

Each side says the other has to take a step. And if there is to be a deal, it will likely come at the eleventh hour.

This means that compromises must be made in September before an agreement is reached in October. Both sides have just enough time to ratify an agreement before the end of the year.

This week there were suggestions for possible progress – on the role of the European Court of Justice and the overall structure of a future agreement.

However, the differences between the two sides are significant and are at the heart of the Brexit process: How closely will Britain be connected to the EU in the future?

For the United Kingdom, sovereignty is key; The priority for the EU is to protect the integrity of its internal market.

And at the moment, the two sides often seem to talk past each other in public.

When asked whether the talks were nearing a breakthrough or collapse, a senior British official who was involved in the negotiations said they were "potentially close to both."

"I can see how we can make a breakthrough relatively quickly if they (the EU) adjust their position."

For Michel Barnier, the EU's chief negotiator, the boot is on the other side.

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"The current refusal to commit to open and fair competition and a balanced fisheries agreement," he said, "makes the UK unlikely to have a trade agreement at this time."

Mr Barnier insisted that EU positions on difficult issues should not be tactical but should protect the EU's long-term interests.

But his British counterpart David Frost does exactly the same thing about Britain's stance.

"We have always been clear that our principles in these areas are not easy negotiating positions," he said, "but an expression of reality that we will be a completely independent country at the end of the transition period."

Spoiler: Trade negotiators always say something like this.

But both sides will soon have to decide when and how they want to compromise or whether they are willing to leave.

Britain had hoped that further progress could be made this month, but it was always unlikely. The EU had too many other things on its mind.

EU leaders have I just emerged from a five-day marathon summit that focused on a corona virus recovery fundand the EU budget for the next seven years. These things are more important to them than trading with the UK and had to be addressed first.

Officials from Germany, currently in the rotating EU presidency, have made it clear that they will focus on trade talks with Britain in September and October.

As the negotiations continue in August – and progress could be made in a number of areas – the most difficult issues will still be debated in the fall.

Time pressure is an important factor as the transition period after Brexit ends at the end of this year.

But mood music is also important. While the Boris Johnson government sees Brexit as an opportunity, the EU still sees it as a mistake to be managed, and this has implications for these negotiations.

When you make a trade deal, you usually celebrate the opening of the markets and make trading a bit freer. This proposed agreement is about the extent to which trade between the UK and the EU will be less free than before.

And that is more difficult to inspire.

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Michel Barnier and David Frost are negotiating for the EU and the UK

Despite some gloomy headlines in British newspapers this week, there is an additional factor to consider.

When trade negotiations fail, things usually stay the way they are. In this case, however, an interruption in the talks leads to sudden and significant changes in the economic relationship between the UK and the EU.

There will be some changes at the British borders anyway, whether deal or no deal. It will be a challenge.

On both sides of the channel, companies already struggling with the corona virus are desperate for their political leaders to offer a degree of security.

And that is one reason to believe that compromises can still be found and that no matter how imperfect a deal can be.

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