Businesses urge UK, EU to continue FTA efforts

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By EARLE GALE in London | China Daily Global | Updated: 2020-10-19 02:10

British companies called on Sunday for both sides to continue seeking a free-trade deal after negotiations between the United Kingdom and the European Union appeared to have ended in failure.

London and Brussels had previously said a bare-bones free-trade deal needed to be in place before a summit of the bloc's leaders ended on Friday.

The two sides have been trading temporarily as if the UK is still a member of the bloc it left on Jan 31, but that arrangement concludes at the end of December.

If a replacement deal is not in place at the start of 2021, Britain and the EU will revert to trading under World Trade Organization rules, something the UK's business community has said would be disastrous for the economy.

Boris Johnson, the UK prime minister, said on Friday the failure to find a free-trade deal by the deadline meant, for him, the talks were effectively over and that the UK needs to "get ready" to trade without an agreement in place.

His spokesman told the BBC there was "no point" continuing discussions without some important changes.

The spokesman said: "There is only any point in (EU lead negotiator) Michel Barnier coming to London next week if he's prepared to address all the issues on the basis of a legal text in an accelerated way, without the UK required to make all the moves or to discuss the practicalities of travel and haulage."

Ursula von der Leyen, the president of the European Commission, had earlier tweeted that Brussels was willing to send a negotiating team to London.

With the talks possibly over, the ratings agency Moody's downgraded the UK's credit status. It cited challenges posed by Brexit and the novel coronavirus as reasons for doing so.

But after Johnson appeared to close the door on the possibility of more talks, one of his senior ministers insisted the door was "still ajar".

Michael Gove, the UK's minister for the Cabinet Office, confirmed on the Andrew Marr Show that the sides had been at loggerheads over fishing rights and state aid to companies and said the EU will need to speed up the negotiating process and come up with some concessions if there is to be more talks in the coming days.

"It was the case we were making progress, but then the EU retreated from that," Gove said. "We have drawn the conclusion that, unless their approach changes, they are not interested and they have, in effect, drawn stumps."

The EU responded by saying it was prepared to "intensify" talks but added that it is not willing to agree a deal at "any price".

The Confederation of British Industry, a business association that claims to talk for 190,000 enterprises, urged both sides to keep talking and said a deal would help the nation recover from the economic damage caused by the novel coronavirus.

"After four years of debate, there must be a resolution," it said in a statement. "2021 can then be a year to rebuild, rather than regret."

But the Guardian newspaper said any deal will not be good enough.

The paper said a joint plea from more than 70 companies, trade associations, and professional bodies issued on Sunday urges Johnson to not only avoid a no-deal Brexit but also avoid reaching a last-minute "thin" trade deal that would be almost as bad as a no-deal Brexit.

Anand Menon, director of The UK in a Changing Europe center at King's College London, said: "One of the things the current furor over deal v no-deal serves to disguise is the fact that, even if there is a deal, it will be a relatively 'thin' one which will lead to potentially serious disruption and have a significant impact on the economy."

The Financial Times noted that the 70 parties to the joint statement represent sectors including automotive, aviation, chemicals, farming, pharmaceuticals, technology, and financial services and have more than 7 million workers between them.

They want the UK government to return to the negotiating table in search of a good-quality free-trade deal with the EU.

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