Key Issues Remain Unresolved
Fears of the health of UK/EU trade talks have come back into the spotlight this week. Following a warning from Michel Barnier last week that the UK had two weeks to “save” the trade talks, the prospects of the UK leaving the single market without a deal having risen.
The UK’s chief Brexit negotiator Lord David Frost has warned Barnier that the UK will not strike a compromise over the EU’s insistence that continue to abide with EU rules on state aid. This demand from the EU has proven a key sticking point over the duration of the negotiations thus far and now threatens to derail the talks altogether.
Former Australian PM To Advise on Negotiations?
The former Australian Prime Minister, Tony Abbott, is reportedly being considered for a role in helping the UK government resolve the issue. Abbott told the Common Foreign Affairs Committee this week: “I have had some discussions with members of the British government. I am more than happy to help but there is nothing official as yet”. Abbott refrained from offering any details on what his role might be in the negotiations adding only that: “I would be doing it as a private citizen. I don’t think there would be any requirement for Australian government approval.”
In terms of which way Abbott would likely advise the committee if he was given a role, Abbott said the UK should “not fear a so-called hard exit” from the single market and said that any deal should include “no tariffs or quotas on goods, full mutual recognition of standards and qualifications” as well “freeish movement of people for work not welfare”.
News of Abbotts possible involvement in the talks has provoked division within the political community. Emily Thornberry, the Labour party’s shadow international trade secretary called Abbott a “Trump-worshipping misogynist” and said it was “staggering” that Johnson would consider him for a role.
Risks of a No Deal Exit Growing
As talks between the UK and EU continue, it appears increasingly hard to see the remaining issues being resolved within the current timeframe. With the two sides still staunchly opposed over issues such as EU fishing access to UK waters as well as the “level playing demands” pertaining to UK regulations, the risks of a no deal exit are growing each day.
GBPUSD (Bullish above 1.3191)
From a technical viewpoint. GBPUSD continues to trade higher this week within the bullish channel which has framed the post lockdown recovery. With price having broken above the bearish trend line from 2020 highs and the 1.3191 level, the rally is currently sitting just ahead of the 1.3516 level resistance.
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