This Written Statement updates members on the progress of the negotiations between the UK Government and the EU on the future UK / EU relationship following last week’s meeting of the European Council.
After seven months of negotiations, nine formal rounds and a considerable amount of informal engagement between the UK Government and the EU negotiating teams, I had hoped that by now I would be in a position to describe significant progress made, with a comprehensive, negotiated deal signed and agreed. However, I am still not in a position to update you with any certainty on the outcome of negotiations though the deadlines set by the UK Government have now passed and we are rapidly approaching the end of the transition period.
These circumstances were entirely avoidable and of the UK Government’s own making. They refused the calls from us and many others to seek an extension to the transition period to give themselves the breathing space necessary to complete such a complex set of negotiations, recognising the changed circumstances arising from the Covid pandemic. Instead the UK Government insisted that it was perfectly able to respond to the Covid pandemic and achieve a good outcome to their first trade negotiations in over 40 years.
In the absence of a meeting of the Joint Ministerial Committee (EU Negotiations) prior to the European Council last week, I wrote to the UK Government calling on them to prioritise reaching agreement on a deal and setting out clearly what the UK Government should do in the best interests of businesses and communities in Wales, and across the UK. The letter built on the series of letters which I wrote over the late spring and summer which were provided with my Written Statement of 8 September.
The priority must be to reach a deal. The areas of difference such as fisheries and state aid are important, but not enough to jeopardise a comprehensive trade deal the rest of the economy so desperately needs. The Prime Minister claims that the UK will ‘prosper mightily’ in a no deal scenario. A no deal will result in significant short term disruption and considerable longer term costs to the economy. The higher costs for businesses, the additional barriers to trade will put the UK at a significant competitive disadvantage, hitting businesses at a point they are still grappling with the impacts of Covid-19 to the economy and threatening the jobs and wages of many citizens right across Wales.
It is critically important that any deal protects the economic interests of Wales. In my letter to the UK Government, I called on it to ensure the deal minimises barriers to trade. The much heralded ‘zero tariffs zero quota’ deal is of diminished value if there are significant non-tariff barriers – such as limited provisions relating to Rules of Origin, or general regulatory or sector-specific technical barriers to trade – that make trade more difficult and more expensive for businesses in Wales.
With the UK Government unwilling to prioritise the needs of the economy, if a deal is reached it is unlikely to be as comprehensive or ambitious as both parties aimed for at the start of the negotiating process and certainly far distant from the type of deal the Welsh Government has consistently called for.
Moreover, the UK Government’s Internal Market Bill – which contains provisions that would break international law as well as threaten the devolution settlement – makes reaching a deal with the EU more difficult. Sadly, the UK Government shows no sign of recognising the way its approach undermines the international reputation of the UK with the EU and wider.
The UK Government clearly still believes – more than three years after we were promised that negotiating a good deal with the EU would be easy and nearly a year after the current Prime Minister boasted of an ‘oven ready’ deal – that bluster and threats are the way to force the EU to compromise. With the UK buffeted by the Covid crisis, what the country needs now is mature leadership not posturing.