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The post-Brexit trade talks between the UK and the EU were never going to be easy.

The UK left the EU on 31 January and we’re now in a transition period until the end of the year, with all the rules and regulations and budget payments staying the same.

That means time is of the essence and to make matters worse, the talks have been taking place via video link, in the long shadow cast by the coronavirus crisis.

So there have been no chances for informal chats in the corridors to try to push things forward.

But as the EU’s chief negotiator Michel Barnier said, that’s not the only reason that little progress has been made after four rounds of negotiations.

It’s mainly a matter of substance.

Comprehensive deal?

There’s no agreement so far on even the basic structure of what they’re trying to negotiate.

The EU wants one comprehensive deal covering all aspects of the future relationship, not just trade. But the UK sees that as an effort to keep it tied more closely than it wants to European institutions and ways of doing things.

The UK argues there should be a series of separate agreements, including a basic free trade deal. But the EU sees that as another example of the UK trying to cherry-pick the benefits it wants, while avoiding the obligations of EU membership.

Key disagreements

There are also specific issues on which negotiators have hit a bit of a brick wall.

First of all, there is what is known as the level playing field. That means measures to ensure businesses on one side don’t have an unfair advantage over their competitors on the other.

All trade agreements have such measures, but the EU wants the UK to stick particularly closely to EU rules on things like workers’ rights, environmental regulations and state aid, or subsidies for business.

Then there is fishing: the UK would like full access to the EU market to sell its fish there, but in return the EU wants full access for its boats to fish in UK waters. British negotiators say that’s not possible because the UK is now an independent coastal state.

Fishing makes up only a tiny part of the economy on both sides, but it was a big part of the Leave campaign that won the Brexit referendum in the UK in 2016.

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A third important area of disagreement is what is described as the governance of any future agreement. That is partly about the overall structure of the deal, but it’s also about how any new agreements would be enforced, and about the role of the European Court of Justice.

Another issue which will remain extremely sensitive is the way the UK proposes to implement the agreement it made with the EU before Brexit, on keeping the land border in Ireland (which is now the border between the UK and the EU) as open as it is now.

The EU is concerned that the UK may not live up to all of the commitments it has made; the UK strongly disagrees.

Clock ticking

So there are plenty of issues to resolve and it normally takes years to do a trade deal. But this process only has a matter of months left.

And if no trade agreement is completed by the end of the year, the UK won’t have any formal deal with its closest neighbours, which account for nearly half its total trade.

It’s also worth remembering, though, that the negotiations are not just about trade. There are important talks, for example, about police and security co-operation as well. The UK wants to maintain the same access to shared databases that it has now, but the EU says that isn’t on offer to non-members.

It is a wide-ranging agenda, with little time left to come to terms. By law, any extension to the transition period would have to be agreed by the end of this month, and the EU says it is willing to talk about an extension.

The Scottish and Welsh governments are in favour, so is the Northern Ireland Assembly. But the UK government has repeatedly ruled that option out.

It says it wants to get on with things.

Basic deal?

So can any basic deal still be done?

If there is political will to make concessions on both sides, then yes, perhaps it can.

The prime minister will get directly involved this month. He’s due to hold talks with the presidents of the European Commission and the European Council on how the negotiations are going.

And high- level political involvement can lead to progress.

If it doesn’t, businesses on both sides of the Channel have just over six months to prepare for an abrupt change in the way they trade, at a time when many are already struggling to stay afloat.

The economic challenges caused by Covid-19 could strengthen the case for compromise; or it is possible that those who favour a more radical break with the EU will decide to push on regardless.

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