MNI SOURCE: Basic UK-EU Goods Deal Doable By End 2020: EU Srce

By David Thomas

     BRUSSELS (MNI) - The European Union believes a trade deal with the UK is

perfectly feasible by the end of 2020 but is likely to form a basic agreement

for certain goods only, with any deeper trading relationship pushed into

longer-term negotiations, a senior EU source told MNI.

     "It can't be as broad as the Canada FTA, for example, and we can't have in

place everything that is in the (UK-EU) Political Declaration," the well-placed

source said.

     It was likely that talks would need to continue beyond 2020 on deepening

and strengthening such a basic agreement. Suggesting a minimalist approach from

Brussels in response to the one-year timeframe insisted upon by the

newly-returned UK government, the source added: "But trade deals even once done

always evolve."

     --EARLIER START

     The source also said that the EU Commission would most likely have its

negotiating mandate for a UK trade deal ready by early February - a month

earlier than many were anticipating - meaning that talks could commence by

middle of that month, once member states had approved the mandate.

     To meet UK demands that a trade deal be done by the end-2020 deadline,

without resort to any extension, the source said it was most likely that the

deal would be negotiated under so-called 'Union Competence' rather than 'Mixed

Competence'.

     This would effectively streamline the negotiations and allow a high degree

of autonomy to the Commission's trade directorate. It would also avoid the need

for a potentially protracted round of national ratifications as well as limiting

the involvement of member states during the talks.

     --ZERO SUM GAME

     Another EU source took the more familiar line from Brussels that: "With

basically only eight effective months to cut a deal we will need to prioritise.

Member states will certainly have 27 different ideas of what is an absolute

priority."

     This official said that the scope of any deal would need to be limited to

meet the demands set out by UK Prime Minister Boris Johnson for regulatory

autonomy - not only the ruling out any extension to the transition period.

     As a result, it would most likely be limited to trade in manufactured goods

but could satisfy Johnson's aims for zero tariffs and zero quotas. "That said,

trade even in goods will not be the same. Companies will have to realise and get

prepared for that," this source added.

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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