Inside the Brexit Talks, Frustration Starts to Give Way to Hope

Britain‘s chief negotiator, David Frost, and the EU’s deputy chief negotiator, Clara Martinez Alberola, will meet in person in Brussels on Monday for the first time since March. One is a committed Brexiter who used to run the Scotch Whisky Association, the other a Spanish lawyer who has worked for the bloc for almost 30 years.

As in all diplomatic battles, while the politicians pull the strings, it is these people who work behind closed doors -- and the rapport they manage to build -- that will make or break a deal. Their task: to resuscitate one of the most important international negotiations since World War II in a period so short that many European politicians and trade specialists say it is impossible.

While the three years of negotiations following the 2016 referendum dealt with the terms of the U.K.‘s departure from the EU, little was agreed about what would happen next. That has to be thrashed out now, before a transition period that keeps the U.K. bound to the bloc’s rules ends on Dec. 31. Prime Minister Boris Johnson refused to take up the option of extending it, meaning this deadline, unlike so many before in Brexit, is for real.

Covert Dash

If the two sides fail to get a deal, businesses and consumers would see the return of tariffs, quotas and greater customs red tape. But there could also be a sudden end to cooperation in a whole range of other areas like security that politicians on both sides warn could be catastrophic at a time when Europe is under pressure from a more assertive Russia, a protectionist U.S., and an increasingly dominant China.

Frost and Martinez Alberola‘s last in-person meeting wasn’t made public. In mid-March, as borders were closing across the world as countries grappled with the coronavirus pandemic, the Spaniard and her No. 2, Paulina Dejmek Hack, made a covert dash to London from Brussels.

At that point, the EU wasn‘t sure whether Johnson was serious about not extending the negotiating period beyond 2020, nor were they certain he genuinely wanted an agreement. The information the two officials brought back was enough to keep the process going through the Covid-19 lockdown. It’s that sort of informal contact that will be vital over the weeks to come.

‘Confidential Channels’

“The most important thing in any negotiation is there have to be confidential channels, perhaps at the David Frost level or at deputy negotiator level, so there‘s a safe space for each side to float hypothetical compromises without fear they are going to be leaked,” said David Lidington, who, as former Prime Minister Theresa May’s de facto deputy, played a key role in the U.K.‘s withdrawal negotiations. “That’s why trust is absolutely essential to any deal. Thats what they need to establish.”

Since the coronavirus outbreak, talks on the future relationship -- covering a comprehensive free trade agreement, as well as cooperation in other areas such as security, aviation and the politically sensitive right to fish in British waters -- have been continuing by video link. Its an unwieldy process. Drawing on as many as 100 people on each side, the negotiations are broken into 11 sub-groups handling each topic.

Martinez Alberola is deputy to EU chief negotiator Michel Barnier, a former French foreign minister who oversees the European side and liaises with the bloc‘s 27 national governments. Frost, a former British ambassador to Denmark and a diplomat until 2013, is a special adviser to Johnson, based in Downing Street. On Sunday, it was announced he will take over as the prime minister’s National Security Adviser at the end of August.

Bogged Down

The past four months of talks have seen the two sides barely move beyond reciting the scripts detailing their opening positions, according to multiple people involved, who spoke to Bloomberg on condition of anonymity because they werent authorized to speak publicly.

One official said they have done nothing apart from negotiate an agenda. A second said they hadn‘t even managed that. A third spoke wearily about hearing the same conversation about fish for a total of 10 hours. Others have left their negotiating sessions frustrated at their opposite numbers’ refusal to fill the time even with small talk.

Even behind closed doors, the U.K. and EU trade accusations over why it got like this. Some of it is down to fundamental disagreement over basic principles. For example, Britain doesn‘t recognize the EU’s concept of a level playing field -- the demand that the U.K. sticks to some of the bloc‘s rules to prevent potential unfair competition. In turn, the EU has insisted on “parallelism,” where it refuses to negotiate on anything if the U.K. doesn’t engage on everything. Its not hard to see why that results in deadlock.

Last Minute

Each side also accuses the other of using the clock as a tactic, with each believing time pressure works in their favor, officials said. But considering the EU‘s trade deal with Canada took seven years to negotiate and the Transatlantic Trade and Investment Partnership with the U.S. was discussed from 2013 before being “frozen” unfinished when Donald Trump won the 2016 election, it is obvious there is a huge amount to squeeze into the next few weeks. The EU wants its leaders to sign off on an accord at their summit in October, while Johnson has said he doesn’t expect the talks to last beyond the summer.

In regular trade negotiations, “leaving everything for the last minute is not a good tactic,” Ignacio Garcia Bercero, the EUs chief negotiator on TTIP, said on Twitter earlier this month. “What makes U.K.-EU negotiations unique is that the status quo is not the default option if no agreement is reached -- which makes not leaving everything for the last minute even more important.”

While playing down any chance of a breakthrough this week, both sides privately promise they are ready to change. A video call on June 15 between Johnson and the EUs leadership, in which he convinced them he wanted a deal, has injected fresh momentum. EU officials say it was the moment they had been waiting for. One senior U.K. official said a deal will now be done because the government has to move on from “dither and delay” over Brexit.

Barnier, Martinez Alberola and Frost will now be freer to decide what sort of negotiation style works best for them personally, a person familiar with the EU side of the negotiations said. Thats likely to mean more informal chats, a more flexible approach from both teams, and conversations about creative compromises rather than the rigid video conferences.

Final Obstacles

“What you don‘t have when you’re not meeting in person are the pull-asides,” said Anthony Gardner who, as U.S. envoy to the EU under President Barack Obama between 2014 and 2017, led the American side of the TTIP negotiations. “As ambassador, I could float things with the EU. You could ask ‘Would this work on your side if we did this？’ -- things you dont want to put on paper, or even in an email.”

Getting to know counterparts personally, “even their body language, their choice of words when you put an idea to them” can make a huge difference to whether a deal can or cant be struck, Lidington said.

Despite the immense time pressure and the real red lines on both sides, officials close to Frost and Martinez Alberola are more optimistic of success than they have been all year. But there is a very long way to go, and any number of variables that could scupper an agreement, particularly when leaders like French President Emmanuel Macron or German Chancellor Angela Merkel, start to give it some attention after the summer. By that time, any emerging accord might be only a husk of the ambitious agreement the EU had hoped for.

“It‘s a dangerous game when the U.K. is convinced ’the EU needs a deal more than we do and the Germans will ride to the rescue,‘ -- or if the EU thinks the British need it more than they do,” Gardner said. “We’re at the end of June, and is it doable？ Yes, it is doable, but it might come down to what the ‘it’ is.”

— With assistance by Kitty Donaldson