Brexit talks: To Deal or not to deal?

Market Trends - 16/10/2020

The Prime minister of the U.K. Boris Johnson will decide today whether to continue with the postponed Brexit trade discussions, after negotiators sank and failed to strike an understanding before the U.K. prime minister’s self-imposed deadline of 15 this month.

There was “some progress” covering competition commands, according to an EU diplomat who didn’t want to be identified due to the sensitivity of the discussions. However, the two sides insist that they have not yet solved all their disagreements.

The Prime Minister Johnson described to EU representatives last Wednesday that he was dissatisfied by the fact that they had not moved towards a solution over the past 14-days according to a spokesperson. During a phone call with the European Commission and Council presidents, Ursula von der Leyen and Charles Michel, Johnson stated that he would wait for the result of a European summit on Thursday “before setting out the U.K.’s next steps.”

The 27 leaders announced yesterday afternoon that they wanted discussions to be moved faster as they understood that there were still a few more weeks free to solve their differences. At some point, in their statement, they said that

“The European Council invites the Union’s chief negotiator to continue negotiations in the coming weeks, and calls on the U.K. to make the necessary moves to make an agreement possible.”

Nonetheless, their statements were not favorably accepted in London. David Frost, the U.K.’s chief negotiator, stated that he was “disappointed” with the word from the EU and reinforced the fact that the prime minister will publish today whether he will place an end to trade discussions.

The primary obstacle at this point has been over fisheries, a problem that brings several political pressures for the U.K. administration. However, that pressure is also on some EU countries, including France. There are further disagreements over competition rules and the future governance of their arrangement.

The above content is considered to be market commentary information and shall not be perceived as independent investment research or investment advice.

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