It is nearly four and a half years after the referendum and three and a half years after Theresa May triggered Article 50 and the process beginning the UK’s formal exit from the European Union. From before the referendum to today, the Chamber has strived to get your message across for tariff free and full market access between the EU and the UK that respects the Single Market and honours the Good Friday Agreement. As we enter the final stretch of the negotiations, it is our view that a deal is now in sight. While details are still unclear agreement has been reached in key areas such as trade in goods, services, transport, energy and participation in EU programmes. However, that is not to say that these areas are as comprehensively covered in the free trade agreement that we would like, hence the commonly used term of a “Skinny” deal is a fair description of what seems to be coming down the tracks.

In recent weeks significant progress has been made in two of the three wedge issues of the negotiations. The EU is no longer seeking that the UK adopt EU State Aid rules and therefore dynamically align with those rules. In return, it is likely that high-level principles on State Aid rules will be adopted into the trade deal that will shape and condition subsidy provisions on both sides. Lord Frost in his presentation to House of Lords last week outlined examples of high-level principles that may be adopted such as:
• Justified on public policy grounds or market failure;
• Proportionate and not excessive;
• Open and transparent;
• Aimed at changing behaviour;
• The right instrument for the policy purpose; and
• To be avoided if there are negative effects on trade and investment.

You may recall that the Chamber has advocated to both parties for such an approach for quite some time:

“Both sides will need to meet each other halfway on level playing field provisions. The final arrangement can still respect the UK’s independence and sovereignty while taking into account the proximity of the UK to the EU. For an agreement to be reached on this matter, both sides will need to agree general common standards ensuring neither side engages in pre-defined anti-competitive behaviour. All international trade agreements contain commitments on common rules and the solution here sees the EU moving forward from explicitly requiring that the UK adhere to rules expressed as EU law in a situation where the UK maintains comparable laws of its own volition.”

On dispute settlements, both sides have acknowledged that progress has been made although there are a few areas that have yet to be ironed out however neither side is of the belief that a deal will not be reached on a dispute settlement mechanism.

It seems that the final pinch point of “Fisheries” remains. The UK has reiterated that it should be treated as an independent coastal state as is standard practice in Free Trade Agreement negotiations. As reported by Tony Connolly (13/10/2020), Coastal Member States of the EU are adamant that the concerns of the EU’s fishing community should not be disregarded in the final make up of the trade deal. The view within the EU seems to be that failure to reach a deal would be the very worst outcome for the EU Fishing sector not least in Ireland. Any deal that is reached should ensure that the fishing sector, as well as the coastal towns it represents, is supported by the EU as a whole.

Tomorrow is the British Prime Minister Boris Johnson’s deadline for reaching a principled agreement. While that may not be achieved it is our view that a deal is within reach for the EU’s deadline of October 31. On November 23-26, the European Parliament will meet to consider ratifying the EU–UK draft agreement. At that stage we hope that not only will the EU Parliament be voting on a deal but that the UK Government would have amended the controversial Internal Markets Bill and that sufficient progress would have been made on the implementation of the Northern Ireland Protocol. While separate to the trade talks, unless resolved, these two areas have the potential to scupper passage of the trade deal.

It is the view of the British Irish Chamber of Commerce that pragmatism and goodwill on both sides will prevail and that a “Skinny” agreement will be reached. Tariff free trade between the UK and Ireland is no small feat especially in high tariff areas such as agriculture. This deal will also provide a platform to build a greater level of economic cooperation between the EU and the UK into the future in areas such as Data Transfers, Financial Services, Energy, Research and Innovation to name just a few. The British Irish Chamber of Commerce is in a uniquely strong strategic position to contribute proactively to this vital work. With the support of our members, we will build on any deal by mobilising key voices across the UK, Ireland and the EU to constructively support this process in the best interests of both British and Irish people.