EU-UK tension builds up as both sides prepare to begin trade talks despite coronavirus

The UK may accept the “price” of tariffs on goods to strike a trade deal with the EU, Michael Gove said in the House of Lords, insisting that there would be no extension to the Brexit transition period beyond 31 December.

Gove hinted that the UK could drop its ask for a zero tariff and zero quota trade deal and instead seek a carbon copy of the EU's trade deal with Canada (CETA).

"Giving up on the demand for a “zero-tariff, zero-quota” deal could be acceptable to secure the prize of breaking free of EU rules," he told a parliamentary inquiry.

The comments come after government sources insisted the EU would have to give way to rescue a deal, accusing Brussels of refusing to accept the UK’s decision to be independent.

During his 90-minute appearance in the Lords committee yesterday, Gove also confirmed the UK would exchange texts with Brussels on the government’s negotiation position on fishing rights in the “next few weeks”. An agreement on fishing and financial services is due to be made next month as part of the first stage of ratifying a cross-Channel agreement.

Meanwhile, EU trade commissioner Phil Hogan has hit out at Westminster and urged politicians to raise such proposals with the EU’s chief negotiator, Michel Barnier, instead of "in the airwaves".

He said: "We’re going to have to make difficult decisions at the end of June. We’ve waited a long time for the UK to come up with its mandate and be ready to negotiate. We’ve been very patient with the UK in terms of the slow pace it’s shown in relation to engaging with the discussions."

Competition concerns

Elsewhere, the EU is concerned about possible unfair competition in the future. As UK businesses have built relationships within the EU market for the past four decades, there are worries that if they slash regulations such as labour, state aid and/or environmental rules in the future, then that will give UK businesses an advantage over European ones in their own single market.

The EU is seeking a commitment from the UK to keep in line with its competition regulations long after Brexit. However, the UK disagree with this and have said that abiding by those rules is not on the table.

The next round of EU-UK negotiations takes place next week and with Brussels feeling that the UK is dragging its feet in areas where it does not want to negotiate, means that political intervention may be needed on both sides in order to find a compromise. With time running out to negotiate a deal with Brussels, particularly with the world dealing with coronavirus, the UK hopes to avoid a no deal situation and that the EU will give in and compromise far more than it intends to.