Latest Brexit talks ‘cabotaged’

By Gareth Jones, Newgate Public Affairs

Brexit negotiations have resumed in Brussels this week, with the latest scheduled negotiating round taking place between EU chief negotiator Michel Barnier and his UK counterpart David Frost over the past few days and set to conclude tomorrow. 

While no-one is expecting a major breakthrough this week, the UK Government has expressed confidence that it can agree a trade deal with the EU next month and the European Commission has said a deal would need to be agreed by October "at the latest". Talks reached an impasse in July, with the key areas of disagreement largely unchanged, with the most contentious issues revolving around fishing rights and ‘level playing field’ provisions (i.e. how closely the UK will stick to EU rules on things like workers' rights, environmental regulations and state aid, or subsidies for business). 

So far this week, there appears to be little progress on those two issues, but another matter has emerged as a sticking point between the two sides – road haulage. The issue specifically concerns access to the EU’s single market for UK truckers – and their rights to drop off and pick up loads inside EU member states, a process known as “cabotage”. The UK has asked for a reciprocal arrangement whereby British truckers would be able to do two pick-ups within EU member states – and the UK offering the same right to EU hauliers in the UK. From a business, commercial and environmental perspective, such a deal would make sense for both sides (particularly as there are far more EU hauliers operating in the UK than vice versa). However, Barnier has rejected this proposal, claiming such a deal amounts to cherry-picking in terms of single market access. 

While this may be a relatively niche and technical issue, it is yet another example of how business interests have been overridden by the political imperatives of the UK and EU throughout the negotiations – and this perhaps explains why industry lobbying on trade issues has been largely unsuccessful over the past few years. In this instance, the EU’s overriding priority has been to demonstrate that Brexit will mean a reduced level of access to the single market for the UK, particularly if the UK does not sign up to the EU’s level playing field provisions. Indeed, Barnier’s rejection of a cabotage deal has been widely seen as a tactic to extract concessions on level playing field provisions from the UK.

On the UK side, Boris Johnson and David Frost have repeatedly emphasised the importance of regulatory freedom and sovereignty as the key objectives in Brexit negotiations, rather than trade or economics (as evidenced by Frost’s speech in February). This would make wholesale compromises on level playing field provisions difficult to achieve without a political cost. However, if a deal is going to be struck this autumn, then compromises will need to be made – on both sides. And if these compromises are made, they are likely to be made at the last minute.