Trade Talks: interview of Aline Doussin, Trade Partner at the law firm Hogan Lovells
Aline Doussin, Trade Partner at the law firm Hogan Lovells, provides an outline of what we might expect from the Brexit trade negotiations
At the outset of trade negotiations, what are the priorities for both sides (UK & EU)?
The UK and the EU start negotiations from a unique position, with convergence of rules. But it seems from Boris Johnson's vision for EU relations issued in the first week of February, the UK government has said it would reject any trade deal that includes ‘high alignment’ on rules, and any role for the European Court of Justice.
Ultimately, the UK will not be able to duck fundamental choices on how close it wants to stay to the EU internal market and the obligations it will have to accept as a consequence. The UK may be able to make the EU’s offer a bit less stark. But it needs to be prepared to make trade-offs. High access and alignment can minimise disruption, but are likely to bring difficult political obligations in the form of free movement and a role for supranational institutions.
What does the process look like at this stage?
The UK will have a ‘traditional’ trade agreements structure, with negotiation powers being given to the executive, and draft agreements being approved by Parliament. There is no indication at the moment as to how mandates or priorities for trade agreements will be agreed – this will be clearer in the first weeks of February. We expect that the Department for International Trade (DIT) will be playing a key role, but there will be a need for a centralised approach at No. 10 or the Cabinet Office. Each specialised sector (or chapter) of the negotiations will require significant input and leads for specialised government departments. For instance, the HM Treasury will need to weigh in on everything related to financial services.
What will the structure of the agreement look like?
The Political Declaration (revised at the end of last year) gives us the baseline for the negotiations. Both Parties envisage an ambitious, wide-ranging and balanced economic partnership.This partnership will be comprehensive, encompassing a Free Trade Agreement, with zero tariffs, fees, charges or quantitative restrictions across all goods sectors (including agri-food), and with appropriate and modern accompanying rules of origin. We don't know if it will be single overarching agreement, or a series of separate agreements to be negotiated in parallel. There is no clear-cut answer here, but the approach will have a big impact on the strategy in the negotiations.
What is your sense of the feasibility of the December 2020 deadline?
This would be the fastest trade negotiation the EU would ever have concluded. The areas of the agreement for which the EU has exclusive responsibility would be able to enter into force once the Council concludes the trade agreement (‘provisional application’). Therefore, the shape of the future relationship between the UK and the EU past 2020 is still very much an unknown at this stage, and the possibility of a no-deal Brexit should not be discarded in the context of this challenging timetable. If the EU and the UK cannot agree to a deal by December 2020, the default position will remain a no-deal expiry of the transitional period and therefore resorting to the Northern Ireland protocol of two borders, and WTO terms for the trading relationship with the EU. It is worth noting that trade is only one element of the upcoming negotiations, and other issues such as citizens’ rights, defence and security cooperation are also extremely important.