Businesses go wild over UK-EU standoff over post-Brexit trade

Relations between the EU and the UK have become so blocked that the ministerial body which governs the trade agreement between Britain and Brussels has not met for more than 13 months, the Financial Times has learned .

The stasis has frustrated businesses battling post-Brexit bureaucracy on both sides of the Channel, with business groups calling on London and Brussels not to leave trade issues ‘on the back burner’.

The Trade and Cooperation Agreement (TCA) signed by the two parties in December 2020 stipulates that a ministerial-level council involving the UK government and the European Commission must meet “at least once a year”.

Although the Partnership Council – the main oversight body for trade relations between the UK and the EU – last met on June 9, 2021, both sides have confirmed that no date is yet to be announced. the agenda for a new meeting.

Several industry groups said there was an urgent need for the council to meet now to address the concerns of exporters facing new red tape, soaring energy prices and supply chain shocks from the war in Ukraine.

“Trade issues such as these should not be put on the back burner until the autumn,” said William Bain, head of trade policy at the UK Chambers of Commerce. “Cooperation and joint working are needed more than ever this summer – the Partnership Council is a key forum to help achieve this.”

But London and Brussels remain at an impasse over Northern Ireland which has already led to the UK’s exclusion from the EU’s €95 billion Horizon Europe science programme.

With the UK government now in caretaker mode following the forced resignation of Boris Johnson, UK officials have said the council is not expected to meet until November or December, well after the date the ruling Conservative party is due to elect a new leader.

The council is convened by mutual consent and officials said they understood the requirement that it meet “at least once a year” to mean that there should be one meeting per calendar year, rather than one. every 12 months.

Downing Street said: ‘The Partnership Council will meet this year as usual and as foreseen in the Treaty. It’s not late or overdue.

But business groups both on the Continent and in the UK say it is now all the more important that the council meets soon. BusinessEurope, the pan-European business lobby group, said its priority was to stabilize EU-UK relations through the ACT. “The Partnership Council plays a key role in the process, so it is important that it meets as foreseen in the agreement,” he said.

Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, the trade body for the UK motor industry, said the proper functioning of the TCA was “essential for the UK motor industry” and central to the international competitiveness of Great Britain.

“While we recognize the current political challenges, the Partnership Council and the Automotive Task Force must come together to help automotive companies maximize the benefits of the agreement,” he added.

The latest council meeting was co-chaired by then-Brexit minister Lord David Frost, who has since resigned, and European Commission vice-president Maroš Šefčovič. He discussed issues such as customs, fisheries and visas, but relations between London and Brussels have since deteriorated due to the prolonged disagreement over Northern Ireland.

The UK government is pushing through legislation to tear up the deal governing post-Brexit deals in Northern Ireland, a move which Brussels says is illegal and risks sparking a trade war.

A senior EU diplomat said it was not surprising the council did not meet given the current atmosphere between the two sides. “There’s nothing to say,” the person added. “The clue is in the name ‘partnership’ – it’s very hard to see when one party is threatening to tear part of the [EU-UK withdrawal] OK.”

EU member states say they have yet to discuss the long delay between meetings. A diplomat said: “We are always open to dialogue. But it is up to the European Commission to decide when it decides that a meeting would be fruitful.

There have been working group meetings on issues such as fisheries and energy. The commission is expected to review the operation of the TCA after the summer break, the diplomat added.

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