What needs resolving in ‘intensive’ Brexit trade talks?

The UK and the European Union have agreed to extend and intensify the trade talks in a bid to resolve the remaining differences between the two sides.

Here is a run through of what is holding up a potential post-Brexit deal.

– What are the main sticking points?

Fishing rights remain a major obstacle, particularly the UK’s insistence that it will hold the right to control who can fish in British waters when the transition period ends on December 31.

The stance could result in a lower fish quota for European fishermen.

State aid and issues over governance, including how potential future trade disputes will be resolved, are also stumbling blocks.

– Can the fisheries wrangle be sorted?

There appear to have been attempts to break the fisheries deadlock as the two sides went into the final scheduled round of talks this week.

According to reports, UK negotiators offered Brussels a three-year buffer period to ease the impact of any reduction in the amount of fish that European boats can catch in British seas after the transition period is over.

The concession would see fishing quotas for European trawlers scaled back gradually between 2021 and 2024, rather than bringing the changes in immediately, in an effort to ease the effect that any loss in quota would have on coastal communities on the Continent.

When talks ended on Friday, however, UK negotiator Lord Frost said the gap between the two sides on fisheries was “unfortunately very large”, in a hint that the bloc had not accepted the offer.

He said that “without further realism and flexibility from the EU” there was a risk that the issue would be “impossible to bridge”.

– What is the issue over state aid?

The EU is concerned that the UK will stray from the previously agreed political declaration in terms of its approach to the so-called level playing field arrangements.

It is worried that the UK could prop-up domestic industries in order to give them an unfair advantage against EU members once free of bloc rules.

The UK argues that Brussels is calling for commitments that go way beyond what it has previously agreed in free trade deals.

But in his statement issued on Friday, EU chief negotiator Michel Barnier said he felt “effective enforcement mechanisms, in particular on state aid” were possible while “fully respecting the regulatory autonomy and sovereignty of both parties”.

– Why is governance a problem?

The issue on governance, according to Mr Barnier, relates to the need for a “robust enforcement and dispute settlement mechanisms”.

He suggested there had been a loss of trust between the two sides when it came to resolving disagreements in a free trade setting after Boris Johnson’s administration passed the UK Internal Market Bill, which the Government has admitted breaches international law and breaks pledges made in the Withdrawal Agreement.

The two chief negotiators will now use their mandate of an intensified timetable to come to an agreement on how to arbitrate on trade disputes in the event of a deal.