Business groups frustrated at UK-EU gridlock on post-Brexit trade

EU-UK relations have become so gridlocked that the ministerial body that governs Britain’s trade deal with Brussels has not met for over 13 months, the Financial Times has learned.

The stasis has frustrated companies battling post-Brexit bureaucracy on both sides of the English Channel, with business groups calling on London and Brussels not to leave trade issues “on the backburner”.

The Trade and Cooperation Agreement (TCA) signed by the two sides in December 2020 says a ministerial-level council involving the British government and the European Commission must meet “at least once a year”.

Although the Partnership Council — the main oversight body for UK-EU trade relations — last gathered on June 9 2021, both sides confirmed that no dates were in the diary for a new meeting.

Several industry groups said it was urgent for the council to meet now to address the concerns of exporters facing new red tape, soaring energy prices and supply chain shocks from the war in Ukraine.

“Trading issues such as these should not be placed on the backburner until the autumn,” said William Bain, head of trade policy at the British Chambers of Commerce. “Co-operation and joint working are more necessary than ever this summer — the Partnership Council is a key forum to help deliver on this.”

But London and Brussels remain in a stand-off over Northern Ireland that has already led to the UK being shut out of the EU’s €95bn Horizon Europe scientific programme.

With the British government now in caretaker mode following the forced resignation of Boris Johnson, UK officials said the council was not expected to meet until November or December, well after the date that the ruling Conservative party is expected to elect a new leader.

The council is convened by mutual consent and the officials said they understood the requirement for it to meet “at least once a year” to mean there should be one meeting per calendar year, rather than one every 12 months.

Downing Street said: “The Partnership Council will meet this year as normal and provided for in the Treaty. It is not overdue or delayed.”

But business groups both on the continent and the UK argue that it is now all the more important that the council meet soon. BusinessEurope, the pan-EU business lobby group, said its priority was to stabilise the EU-UK relationship through the TCA. “The Partnership Council plays a key role in the process so it’s important that it meets as foreseen in the agreement,” it said.

Mike Hawes, chief executive of Society of Motor Manufacturers and Traders, the UK car industry trade body, said the proper functioning of the TCA was “critical to the UK automotive sector” and central to Britain’s international competitiveness.

“Whilst we recognise current political challenges, the Partnership Council and automotive working group must meet to help automotive businesses maximise the benefits of the deal,” he added.

The last meeting of the council was co-chaired by the then Brexit minister Lord David Frost, who has since resigned, and European Commission vice-president Maroš Šefčovič. It discussed issues such as customs, fisheries and visas, but relations between London and Brussels have since soured because of the protracted disagreement over Northern Ireland.

The UK government is now pushing through legislation to rip up the deal governing post-Brexit arrangements in Northern Ireland, a move that Brussels says is illegal and risks triggering a trade war.

A senior EU diplomat said it was no surprise that the council had not met given the current atmospherics between the two sides. “There’s nothing to talk about,” the person added. “The clue is in the name ‘partnership’ — that’s very difficult to see when one side is threatening to tear up part of the [EU-UK withdrawal] agreement.”

EU member states say they have not yet discussed the long delay between meetings. One diplomat said: “We are always open for dialogue. But it is up to the European Commission when they decide a meeting would be fruitful.”

Meetings of working groups on issues such as fisheries and energy have been held. The commission is expected to review how the TCA is working after the summer break, the diplomat added.