MNI SOURCES: EU Sees "Hot Autumn" Trade Talks With The UK

--Officials See Little Chance Of June Breakthrough

--Anticipate Autumn Scramble To Salvage Some Sort Of Trade Deal

By David Thomas

     BRUSSELS(MNI) - EU officials are preparing for a 'hot autumn' of

negotiations as time to conclude a trade deal with the UK runs out, sources in

Brussels told MNI.

     The prospects for a breakthrough in the scheduled June round of trade

negotiations are dwindling fast, but neither side is keen to extend the process

beyond the end of this year, the sources say.

     One well-placed official said the most likely scenario would be for a June

impasse to be followed by a 'low-key' high-level conference on whether to extend

the UK's transition period beyond 2020, probably resulting in a "hot autumn" of

talks as negotiators do what they can to salvage some kind of trade deal in the

closing months of 2020.

     Brussels sources familiar with the talks have come to the view that it will

be politically impossible for the UK government under Prime Minister Boris

Johnson's leadership to request an extension by the agreed deadline of the end

of June. The UK would need to negotiate a continuing contribution to the EU

budget if it asked for an extension.

     "An extension looks less and less likely," one EU source said. "There is no

willingness for that on the side of the UK," while "the EU will not ask for an

extension."

     --POLITICAL BLOCKAGE

     EU officials say that while a trade deal could still be theoretically

achieved by the end of the year, the clash over fundamental issues covering EU

'Level Playing Field' demands, fisheries and governance over trade issues, needs

to be "unblocked" at the highest political level.

     Asked how the impasse may be resolved, one source replied: "That is the

million-euro question. Who will move first?"

     Any such unblocking would need the political endorsement of EU-27 leaders,

the sources say. Following the high-level conference around mid-June, the EU's

chief negotiator Michel Barnier could then discuss with leaders at the summit if

there was any flexibility in the existing negotiating mandate or if a new one

was required which would need EU-27 political endorsement.

     But hopes for such an agreement are low, given the intransigence of France

in particular, the focus on agreeing new economic recovery measures amid

coronavirus, and the shared EU-27 priority of preserving the integrity of the

single market.

     "No deal and trading under WTO rules is not something we want, but we're

prepared for that. The source said. "There's a cost for business, but business

can see the WTO schedule and calculate the costs."

     "The EU will always opt for the integrity of the Single Market over the

short-term business impact," the source continued. "Sure, we have to stay close

to the UK, but not if we have to give in on that."

     --HARD DEADLINE

     Similarly, the possibility of extending to the UK transition period after

the end-June deadline enshrined in the Withdrawal Agreement, while not entirely

ruled out, is seen by EU sources are unlikely.

     "Come October we would ask our lawyers is there a way through? If a

political push comes lawyers will be on it," one source said. "But at the same

time I don't see a lot of scope for that. The deadline is in the Withdrawal

Agreement (and) changing the Withdrawal Agreement is not so easy."

--MNI London Bureau; +44 203 865 3829; email: jason.webb@marketnews.com

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