Brexit talks: 2nd round fails to bring the EU and the UK closer on key issues

Michel Barnier, the EU’s Chief Negotiator and David Davis, British Secretary of State for Exiting the European Union, hold a joint press conference at the end of the second round of Brexit negotiations. (Copyright European Union / Source: EC – Audiovisual Service)

After millions of words that have been said over the matter, last week, the time for a concrete evaluation of the progress of Brexit negotiations came. Last Thursday, the European Union and the United Kingdom concluded the second round of Brexit talks, which was seen to be as the full conclusion of the first leg of negotiations and was regarded as the litmus test of the general progress of the works. And, despite negotiators of both sides said days before the talks kicked off they would work to identify both “their differences and their similarities”, it seems that they made good progress just on the former.

Background

When last month the negotiators of the EU and the UK met for the first official round of the Brexit talks, after the United Kingdom triggered Article 50 of the Lisbon Treaty, the objective of the meeting was only to agree on the “organisation of the negotiations”, as repeatedly said by all key players involved. When the second round came closer though, it seemed clear that both sides had higher objectives and they wanted to bring home some substantial progress. At the start of the meeting, Monday last week, Britain’s Brexit minister and veteran anti-EU campaigner David Davis said it was “time to get down to work and make this a successful negotiation”, and the EU’s chief negotiator Michel Barnier said, “we will now delve into the heart of the matter”, before the two sat down for a first meeting.

“Fundamental divergences”

However, despite such determined approach, it seemed immediately clear after the end of last week’s talks that the two parts are far from reaching an agreement. As soon as the second round of negotiations came to an end, on Thursday, both negotiating teams have recognized there are still “fundamental” differences on key disputes, including issues on citizens’ rights and the Irish border. Most notably, EU’s chief negotiator Barnier, despite recognizing “some progress” has been made, said there was “a fundamental divergence” on how to protect the rights of EU citizens living in Britain and of Britons in the remaining 27 EU countries after Brexit. “Any reference to European rights imply their oversight by the Court of Justice of the European Union,” he told a joint news conference with British Brexit Secretary David Davis.

Citizens’ rights

The citizens’ rights is indeed where the main differences between the EU and the UK remain after last week’s meetings. Both negotiators from the EU and UK stressed they want an early and detailed deal to protect the rights of nearly 5 million citizens that today live on this or that side of the “post-Brexit barricade”, which is actually one of the trickiest points of discussion. The most complicated aspect is indeed the right to move around, the right to work and to to export social benefits after Great Britain leaves the bloc. If no compromise will be found, the risk for 3.5 million EU nationals in the UK and 1.2 million British people on the continent is that there will be no freedom of movement and no real protection while working abroad.

EU’s negotiator Barnier repeatedly reinforced the EU’s message that that any future disputes over citizens’ rights be adjudicated by the European Court of Justice, which at the moment is a total no-go for UK’s Prime Minister Theresa May. “In the withdrawal agreement itself, citizens must be able to find the legal certainty that they need in their day-to-day lives,” Mr. Barnier said. “Quite frankly, as far as we are concerned we can see no other way in which can guarantee the permanent continuation of such European rights as exercised. Clearly any reference to European rights implies their oversight by the courts of justice of the European Union”, he added. UK’s chief negotiator Davis responded: “We agree on the need for certainty on the part of citizens both in the EU and the UK. We obviously have different views on how we achieve that”.

Exit bill

Another area of disagreement surely was the financial one, with the “divorce bill” being the hottest topic. Michel Barnier immediately called for clarity on the British position on the financial settlement. “I know one has to compromise in negotiations but we are not there yet”, Mr. Barnier said. “A clarification of the UK position is indispensable for us to negotiate and for us to make sufficient progress on this financial dossier, which is inseparable from the other withdrawal dossiers”, he also added. The EU’s position in such a crucial matter is that Britain needs to agree a “single financial settlement”, as often stated by EU negotiators, covering debts and unpaid bills after more than four decades of membership. “We know that agreement will not be achieved through incremental steps. As soon as the UK is ready to clarify the nature of its commitments, we will be prepared to discuss this with the British negotiators”, EU’s Barnier also commented last week.

The UK’s “obligations”

The British side acknowledged for the first time last week they have “obligations” to the EU, while uncertainty persisted over the size of such obligations and more. “On financial settlement we both recognise the importance of sorting out the obligations we have to one another, both legally and in a spirit of mutual cooperation”, said UK’s David Davis. “We had robust but constructive talks this week. There is a lot left to talk about, and further work before we can resolve this”, Mr. Davis also added. However, during the Q&A at the end of last Thursday’s conference in Brussels, Mr. Davis refused to give any fresh evidence of the government’s willingness to compromise, as also reported by the Guardian. The EU executive has quantified the exit bill to be in a region of 60 billion euros ($70 billion).

Easy deal

What failed to receive any special mention and probably to gain momentum during last week’s sessions was the trade agreement between the two parts in the post-Brexit era. However, British international trade minister Liam Fox said last week he was convinced a trade deal with the EU should be “one of the easiest in human history” to reach, although his country could survive without one if necessary. The comments from the Cabinet Minister came as Brexit Secretary Davis wrapped up last week’s meetings with his EU counterparts, and only weeks after Mr. Davis described his job as more difficult than working for the space agency NASA.

Indeed Mr. Fox, while on an interview with BBC Radio 4’s “Today” programme, downplayed the importance of securing a free trade deal with Brussels, and argued that Britain could manage even without any deal, if negotiations collapsed and the UK was forced to leave without an agreement. On the reasons why reaching an agreement with the bloc would be so easy, Fox said: “We are already beginning with zero tariffs, and we are already beginning at the point of maximal regulatory equivalence, as it is called. In other words, our rules and our laws are exactly the same”.

Future talks

The two sides published a joint traffic lights report at the end of last week’s round of talks, to show progress on 44 separate issues of contention and coloured them according to how advanced the state of play is. Out of 44 separate issues, the report shows there is an agreement on 22 “green areas” while severe disagreements on 14 “red” issues exist and as many as 8 “amber” areas that need further clarification remain. Now the next round of talks is set for August 28, where progress on questions such as Northern Ireland and its borders with the Republic of Ireland is expected to be made. But, despite high hopes and expectations, Mr. Davis clearly said last week we “shouldn’t expect incremental progress in every round”.