UK Prepared to Accept Tariffs as Price for Diverging from EU Standards: Report

The UK will reserve the right to diverge from European Union standards, even if it means accepting trade tariffs from the bloc.

Negotiations are set to accelerate following Prime Minister Boris Johnson’s return to the frontline of UK-EU talks following the height of the coronavirus pandemic and his own recovery from the illness.

Media reports in recent weeks point to renewed vigour from both parties to get a deal done as soon as possible — calling for a “new phase” of less formal talks. The is EU aiming for October to conclude the process, while the prime minister is seeking to have one agreed by the end of July.

The United Kingdom officially left the European Union on January 31st, 2020, but remains in a transition period, tied to the EU’s Customs Union, Single Market, and associated regulations. During this time, London and Brussels are attempting to finalise a future trading arrangement. The transition period ends on December 31st, 2020, and Prime Minister Johnson has enshrined in law that it cannot be extended beyond that date, meaning that without or without a deal, the UK will leave the Brussels’ institutions, finally fulfilling the result of the June 2016 vote to leave the European Union.

The Financial Times reported on Monday that Mr Johnson will work with senior ministers this week on ways to unlock a deal with Brussels, including that a deal could be signed under the condition that once the UK deviates from the bloc’s restrictive regulations, it will accept new trade tariffs.

The UK is currently in negotiations with Australia, New Zealand, the United States, and Japan for new bilateral free trade agreements which were hitherto impossible to agree when the UK was bound to the EU.

Whether the EU will meet halfway with the UK on regulations is yet to be seen, as it remains a sticking point for EU negotiators, along with fishing rights and the proposed oversight of the trade deal by the European Court of Justice.

Brussels has already signalled that it is prepared to play hardball. With or without a trade deal, the UK will still need to erect customs checks at Britain’s borders. To ease the transition for British traders, the government has announced that it would only undertake a ‘light touch’ approach immediately after the transition period — January 1st, 2021 — and would phase in controls gradually until six months later. The EU, however, has said that it will not reciprocate the approach and put up customs barriers immediately after the end of the transition period.

Germany has also reportedly told the EU to prepare for ‘No Deal’, acknowledging that the UK will not shift on issues like governance and fishing, and given the limited time frame.

The EU has signalled, however, that it may shift on its “maximalist” approach to fishing, where they had wanted to maintain the current Common Fisheries Policy, which results in EU fishermen landing more than 60 per cent of the catch in British waters. The UK wants to negotiate access on an annual basis.

Acknowledging that the EU is willing to compromise but seeks longer-term guarantees, President of the European Commission Ursula von der Leyen said last week: “We ask predictability and we ask for guarantees for our fishermen and fisherwomen who have been sailing in those waters for decades.”