My top takeaway from the first round of UK-EU trade talks is that this is not Brexit phase 1 repeated. The UK side is more realistic and better prepared, and the EU position isn't nearly as solid. A few thoughts... 1/ politico.eu/article/5-take…
Phase 1 Brexit was all about the EU setting the agenda - money, citizens rights, Northern Ireland. So far the UK has set the agenda for trade talks - bog standard FTA, no extension, here are the red lines, we're happy to walk away. 2/
The EU approach is grounded in realities - lack of time for a line by line negotiation, level playing field, single governance framework. But it doesn't yet quite hang together coherently - untested parts (LPF), struggling in defining the price for access to the larger market 3/
The UK side is working hard to win the argument of what is reasonable, normal trade deal, normal level playing field. The EU's arguments on geography and full tariff free access aren't quite landing. Winning the argument might ultimately not matter, but it sets the tone 4/
The UK side weakness remains that business mostly doesn't support it, and the effects of the trade deal they want most likely affect the parts of the economy they want to promote as part of rebalancing. Manufacturing of all sorts is vulnerable. But will that affect talks? 5/
In theory there are also sorts of ways in which the EU can make the UK's life difficult - as we've already seen with financial services equivalence. Most come from the market size. But then the EU also wants to look reasonable. Tough balancing act. 6/
Just round one of course. The UK side is I suspect too confident, and vulnerable on various details if pushed. Their keenness for no-deal can be tested. But the EU also needs to answer some questions like their own appetite for no deal. Interesting times ahead 7/ end
PS I know we're early on a Friday morning, but another busy day ahead...
PPS will add with interesting replies. Agree that UK position on LPF was to a degree undermined by US mandate. But EU position is not yet coherent enough to take advantage.
