UK-EU talks on post-Brexit relations 'in deep freeze'

The Guardian News Paper has published an article explained that the "planned negotiating rounds on the UK’s future relationship with the EU have been abandoned as a result of the coronavirus pandemic, with Boris Johnson’s government still to table a comprehensive legal text for both sides to work on."

Key notes

• During a European commission briefing on Thursday, envoys for the EU capitals were told that holding negotiations via video-conferencing had so far proved impossible.
• The two sides are trying to find a way to maintain dialogue in the coming weeks and months to kickstart the talks, but a previous schedule for negotiating rounds, with weeks set aside for consultation and preparation, has been ditched.

• The European commission published a 441-page draft treaty on 13 March that covers every aspect of the future relationship. The UK left the EU on 31 January and has until the end of the year to negotiate a new economic and security relationship or face trading on WTO terms with large tariffs on goods.

  Despite Downing Street’s public insistence that a similarly comprehensive text would be tabled earlier this month, EU sources said the UK had tabled only four documents covering trade, transport, aviation and nuclear cooperation. London has not tabled legal text on significant issues including security cooperation or fisheries, and nor has it made its texts public.

  EU sources also said the UK’s positions in the texts were in a “different galaxy” to those of Brussels.

• The fact that the UK was still to table a legal text added an extra layer of difficulty, EU sources said.
• The main sticking points between the UK and the EU remain on so-called level playing field commitments to ensure that both sides retain high standards in the fields of environmental, social and labour regulations.
• Officials on both sides are also struggling to find a way to get negotiations going, with plans for talks in London and Brussels now abandoned given the Covid-19 crisis.
• Brussels is seeking non-regression from EU standards and for the UK to “harmonise” with Brussels on state aid rules that limit subsidies.

FX implications

• EUR/GBP’s charting a support structure, bulls look for parity