Following the United Kingdom's withdrawal from the European Union (EU) on 1 February 2020, the EU and the United Kingdom have started negotiations on a new association agreement, which is due to enter into force at the end of the transition period until 31 December 2020.

The UK withdrew from the EU on 1 February 2020 and entered a "transition period", which runs until 31 December 2020. During this period, although no longer a member of the EU, the UK remains part of the EU single market and customs union, and EU legislation continues to apply (with some exceptions). The Withdrawal Agreement is accompanied by a Political Declaration, which sets out the objectives for the future relationship between the EU and the UK. According to the Withdrawal Agreement, the parties will have to implement the agreement and negotiate the future relationship, during a certain transition period.

On 25th February 2020 the EU Council authorised the European Commission to open negotiations on the future association agreement with the UK. Negotiations are being led on behalf of the EU by Michel Barnier, who is the chief negotiator of the Task Force for Relations with the United Kingdom (UKTF). On the UK side, the negotiations are being led by David Frost, who is the EU advisor to British Prime Minister Boris Johnson.

On 23 February, the United Kingdom published its objectives for the negotiations, which are aimed at achieving an agreement similar to the one between the EU and Canada, as already summarised by Boris Johnson in one of his speeches.

Right now, the negotiations between the two parties have as their main objective to address almost all the areas contained in the negotiated Political Declaration and the Withdrawal Agreement, including trade and economic issues, as well as the following three critical issues:

  • Fishing;
  • Level-Playing Field (LPF) commitments;
  • Financial agreement;

With regard to the negotiations on future economic relations, while the parties agree, at the outset, on a comprehensive and balanced Free Trade Agreement (FTA), with the aim of achieving the most "friction-free" trade possible, they remain divided on important aspects of the economic partnership, in particular on fisheries and the Level-Playing Field (LPF) commitments.

The EU wishes the future fisheries agreement to maintain the status quo as far as possible, including reciprocal access to waters in exchange for market access and quota allocation based on historical fishing patterns.

According to a study carried out in 2016, over half of the fish and shellfish landed in UK waters are caught by non-British vessels (mainly from France, Ireland, the Netherlands and Denmark, but also from Belgium, Germany, Spain and Sweden), which have landed 7 times more fish and shellfish (by weight) from the UK's Exclusive Economic Zone (EEZ) than UK vessels from the EU-27 EEZ, and 4 times more by value.

Moreover, the EU fish market is the world's largest importer of fishery and aquaculture products, and the UK is the second largest supplier to the EU-27, after Norway.

Around 70% of the total value of UK seafood exports are to the EU-27 countries, with France being the most important market for UK exports.

The EU also insists that an effective Level-Playing Field (LPF) would ensure fair competition. After the third round of talks in May 2020, the UK's chief negotiator, David Frost, said that the EU's proposal on fisheries was "simply not realistic" and that a Level-Playing Field (LPF) that would force Britain to comply with EU legislation or standards was unacceptable; and if this were ultimately to prove necessary, Britain would seek a less ambitious Free Trade Agreement (FTA).

On the other hand, the EU's chief negotiator, Michel Barnier, said that the negotiation of an FTA that includes tariffs would be much slower. The EU would continue to demand the same Level-Playing Field (LPF) commitments because "open and fair competition is not a 'must do' but a 'must have'.

Michel Barnier, insists that "without LPF there is no trade agreement". London has made it clear that it does not want to commit to an LPF in the future, but the EU does consider it absolutely crucial and survivalist.

After the fourth round of negotiations from 2 to 5 June, the positions still seemed irreconcilable. It should be noted, however, that the previous negotiations on the United Kingdom's withdrawal also had a long stalemate and seemed equally irreconcilable, before the final agreement was reached and then ratified.

There is, however, one aspect, where the two parties were able to reach agreement during these negotiations, and it is related to the financial issue, already delimited within the content of the Withdrawal Agreement.

Although this financial agreement is currently being implemented, it was initially considered to be one of the most difficult areas of the withdrawal negotiations.

An extension of the transition period could provide more space for the negotiations. However, the United Kingdom's European Union Withdrawal Agreement Act (Section 33) explicitly prohibits any extension of the period. An extension would therefore require a new act of the United Kingdom Parliament to repeal that provision, which is generally considered to be politically difficult.

This Friday, the European Union and the United Kingdom gave their assurances that they would end the debate on a further extension of Brexit, scheduled for 31 December. London said "formally" that it does not want any more extensions and Brussels assumes this communication as "definitive", although it warns of the little time left for negotiations, urging the British to speed up the negotiations.

The issue here is that if there is no agreement to make any extensions, the remaining months of 2020 would have to be used both to reach an agreement and to ratify it, if the new relationship is to enter into force, at least provisionally, at the end of the transition period.