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MNI SOURCES: EU And UK Exploring LPF Landing Zone

Both Sides Said To Be Putting In Greater Effort But Talks Still Tough

Repeats story initially run at 1806GMT on December 14

LONDON (MNI)

The two sides in the protracted Brexit trade talks appear to be trying harder to find a breakthrough on the critical issue of fair competition rules and their enforcement to unlock a post-transition trade deal in the coming days, European Union and UK sources indicate to MNI.

Even if an agreement can be brokered on so-called 'level playing field' (lpf) terms -- and talks on the detailed mechanisms are understood to remain arduous -- there is no sign yet of any progress on access for EU fishing boats to UK waters, though many observers believe fisheries can be resolved if the 'lpf' stand-off is overcome.

Both sides remain coy about the substance of the 'lpf' negotiations but it is thought that the discussions involve an element of procedural restraint on the adoption of unilateral sanctions were the EU to disapprove of UK divergence, but embracing future as well as current regulations. Talks between the parties, followed by arbitration if necessary, might be a mechanism which both sides could portray as symmetrical and acceptable.

DISPUTE PROCEDURE

MNI contacts in the UK note that while chief EU negotiator Michel Barnier claims that the UK now fully accepts 'lpf' principles including evolution clauses (new regulations formulated at a future date), the UK is saying that the EU accepts no right unilaterally to take retaliatory action before consultation and arbitration.

Aside from difficulties over the fine print of a dispute resolution mechanism, the proportionality and applicability of any retaliatory action across unrelated sectors are understood to remain key sticking points.

One EU diplomatic source referred to 'lpf' discussions as "still difficult and too fast moving to comment on the specifics."

Another Brussels-based diplomatic contact characterised the mood as "a bit more positive this morning." While there was "some movement on level playing field," this source also said that he was "not sure it will be enough and in time."

"But hope is back on," he added.

BETTER THAN IT WAS


A third EU diplomatic source, who said the three outstanding issues remain on the table, insisted: "The integrity of the internal market is of utmost importance for the EU and the EU27. You can't have your cake and eat it."

A UK contact was more guarded but noted some shift. "I think the optimism is overdone, but it's definitely alive," he said.

"It's clearly better than it was on LPF," he continued. "On fish it isn't. But I have never thought it could fail on fish alone. So that's bullish."
MNI London Bureau | +44 203-865-3823 | kevin.woodfield@marketnews.com
MNI London Bureau | +44 203-865-3823 | kevin.woodfield@marketnews.com

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