The United Kingdom is willing to walk away from post-Brexit trade talks with the European Union if the bloc does not drop its demands that Britain abides by EU regulations on state aid for companies.
Britain’s chief Brexit negotiator, Lord David Frost, informed his Brussels counterpart, Michel Barnier, that there will be no compromise on the issue of state aid, as the United Kingdom is unwilling to be tied by EU regulations, especially in light of the economic crisis caused by the Chinese coronavirus.
A senior Conservative told The Sunday Times that Frost’s negotiating team had discussed whether to compromise on the issue, but that Prime Minister Boris Johnson insisted they remain firm.
“Frost has made clear to Barnier that as things stand he would have to recommend to Boris that we go for no deal. There has been a discussion about whether or not to compromise on state aid, and Boris said no,” the source said.
EU control over state aid has previously made it difficult or impossible to rescue strategic industries such as steel.
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Alongside demands that Britain give up its right as a sovereign nation to support industries during times of national crisis, the EU has demanded that Britain agree to alignment on standards of environmental and labour regulations in order to create a so-called “level playing field”.
The bloc has also demanded that Britain submit to continued EU control over its lucrative fisheries in exchange for a post-Brexit trade deal. The British government has so far refused to bow to the demands set out by the bloc, leading to negotiations to break down.
The two sides will resume informal trade talks this week, with formal negotiations planned for the following week. EU negotiators have signalled that they do not believe a trade deal is likely to be agreed upon before October when the European Council will meet.
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The United Kingdom officially left the European Union on January 31st, 2020, yet it still remains subject to EU laws and institutions until the end of the year, having entered a so-called “transition” period.
If the two sides fail to come to an agreement by October, Britain will begin trading with the bloc largely under World Trade Organization (WTO) terms.
German Chancellor Angela Merkel said on Friday that she expects the negotiations to go down to the wire.
Merkel said that “the crucial weeks are now approaching to clarify the future relationship” between the United Kingdom and the European Union.
There have been discussions between the two sides of a possible leadership meeting between the heads of state for the major players in the negotiations, and whether another Brexit transition extension should be put in.
It is not likely, however, that Prime Minister Boris Johnson would agree to such an extension, as it would clearly be a breach of his campaign promise to “Get Brexit Done“.
“After the transition period, the UK will have its own regime of subsidy control and will not be subject to the EU’s state aid regime. The government will set out further detail of our domestic regime in due course,” a government spokesman said.
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