Will a Draft Treaty Prevent a No-Deal Brexit?

The coronavirus has shifted European leaders’ attention away from the ongoing Brexit process, but the UK’s withdrawal from the EU continues thanks to negotiations currently taking place to draft a final trade deal.

However, both the UK and the EU have failed to make any progress during the Brexit negotiations so far. The key issue that both sides cannot agree on is fishing. The Guardian reports that the UK’s chief negotiator David Frost believes that his EU counterpart Michel Barnier recognizes the need to budge on this issue. Nonetheless, France, Spain and the Netherlands have imposed a tough line on this matter. They insist that these nations must continue to have access to British waters post-Brexit.

The Deadline to Conclude a Brexit Deal is Approaching

The deadline for a deal is fast approaching. The British Government has always insisted that if they cannot negotiate a successful trade deal with their EU neighbors, then they will quit the bloc with no deal.

Over the last few years, the EU has been ravaged by a whole host of issues: Brexit, Trump’s trade war, the automotive industry’s decline in the face of the bloc’s own CO2 emissions, and now the coronavirus. The latter has been particularly devastating for Europe’s economy as most of the bloc has gone into lockdown, with EU leaders struggling to agree upon a rescue package to mitigate the economic effects being caused by COVID-19. That is why the EU is the most vulnerable party in the midst of its trade talks with Britain and they cannot afford a no-deal Brexit.

According to the IMF, Ireland would suffer an output loss of four percent in the event of a no-deal Brexit. German car imports could be levied by a 10 percent tax under World Trade Organization (WTO) rules, and consultants Oliver Wyman have estimated that France would be the third most affected country by a hard Brexit costing French companies €4 billion a year.

Fishing is the Key to Ending this Deadlock

That is why Whitehall is drafting a legal text, or draft treaty, that will lay bare the stark differences between the two sides on key areas, including the maintenance of the British car industry and its supply chains.

To access EU markets, it would have to be shown that at least 50 percent of a British car’s components were British-manufactured.

Barnier’s team has rejected Britain’s suggestion to reduce the administrative burden of sanitary and physiosanitary checks at borders to protect plant, human and animal life. The legal text is expected to explain how an equivalence between British and EU rules can work.

A Deal is on the Horizon

Therefore, this draft treaty has the potential to avoid a hard Brexit, but it cannot work until both parties can compromise on the key issue of fishing. It would be unacceptable for the British to continue to participate in the EU’s Common Fisheries Policy, which sets quotas to conserve fish stocks. Quota hopping within the EU enables big commercial fisheries from nations like Spain and Denmark to grab British stock to meet their own targets.

Equally, the British fishing industry sells fish to other EU countries. In 2014-15 France, Spain and Ireland bought over 140,000 tons of British fish. That is why both the UK and the EU should clarify how British fish can be sold in the latter’s single market post-Brexit.

The Daily Mail suggests that European diplomats are beginning to get “realistic” about their position on fishing. This is probably what is happening behind closed doors.

Barnier refused to budge on the Withdrawal Agreement up until the end of last year. This proves that EU politicians are notorious for agreeing upon a deal at the last minute. But the situation is worse this time as the EU faces even more external threats than it did last year.

A deal is on the horizon and the draft treaty can make it happen, but it is time for the EU to shift its position on fishing.