No-deal back on the menu after Johnson’s dinner date turns sour

It was a dinner that was supposed to provide “political impetus” for a post-Brexit trade deal, but Boris Johnson emerged from three hours of desolate talks with Ursula von der Leyen in Brussels with one British official muttering simply: “No deal.”

The omens were bad from the start; from the moment on Wednesday night when Ms von der Leyen, the European Commission president, instructed Mr Johnson, UK prime minister, to put on his face mask, it was clear this was going to be an awkward encounter.

The photo call brought the clash of political cultures into sharp relief: Mr Johnson, the champion of British sovereignty, baggy-suited, hair askew, alongside the sleek figures of Ms von der Leyen and her chief negotiator Michel Barnier, defenders of the EU’s rules-based order.

The jocular menu of scallops and turbot — a none-too-subtle nod to the row over post-Brexit fishing access to UK waters — seemed less amusing as the evening drew on.

British officials claim Mr Johnson had travelled to Brussels hoping to find a compromise in talks that have stalled on a fair competition “level playing field” and fishing rights, but got nowhere. “They didn’t really respond at all,” lamented one person briefed on the dinner.

The UK and EU negotiating teams ahead of their dinner in Brussels on Wednesday night © Andrew Parsons/No 10 Downing Street

A senior EU diplomat directly briefed on the dinner said Mr Johnson had demonstrated no obvious appetite to reach a deal, reproducing old proposals that failed to respect the basic principles of the EU single market.

“It was described as an almost apathetic performance — the clear overall impression from the UK prime minister was that he was not going to compromise because that would be politically too costly,” the diplomat said.

Two officials briefed on the talks said Mr Johnson and Ms von der Leyen — neither of whom are known for their grasp of the negotiating details — did not engage in a private one-to-one discussion. Mr Barnier and his British counterpart David Frost were in the room throughout.

The result was stalemate. Some British officials railed in vitriolic terms at Mr Barnier and Ms von der Leyen’s refusal to budge and the tension was quickly relayed to the media and diplomats.

Ireland’s Prime Minister Micheál Martin admitted the situation was ‘very difficult’ © John Thys/Reuters

The general conclusion, as dawn broke in Brussels and London on Thursday, was that Britain’s post-Brexit transition period will end in an acrimonious divorce, with no trade deal in place. Micheál Martin, Ireland’s prime minister, admitted the situation was “very difficult” while Mr Johnson later warned people to get ready for the “strong possibility” of a no-deal Brexit.

The pound fell more than 1 per cent against the dollar to $1.3246, while the chances of a trade deal before the end of the year slid to 43.4 per cent on the betting platform Smarkets, down from 64.5 per cent on December 7.

In spite of the gloom, there were glimmers of hope that a deal could yet be salvaged — not least because both sides want a deal and Lord Frost and Mr Barnier were instructed to carry on talking in Brussels.

Downing Street said: “The PM does not want to leave any route to a possible deal untested.” Both sides would take stock on Sunday to see if there was any point in the talks continuing.

The issue of fisheries is principally a haggle: the number of years in which EU boats would be guaranteed continued access to UK waters and the amount of fish they can catch. Both sides believe the issue can be resolved.

The main sticking point remains the EU’s insistence on an “evolution mechanism” to make sure that Britain does not undercut the European regulatory model in future, gaining a competitive advantage.

The EU insists that if the UK fails to mirror improved regulations on the continent in future, it should have the right to impose punitive tariffs. Mr Johnson regards this plan as an unacceptable attack on British sovereignty.

But if Mr Johnson rejected a deal on those grounds, the economic rationale would be far from clear.

Mr Johnson appears willing — under a no-deal scenario — to accept damaging tariffs across the whole economy in just three weeks’ time to avoid the theoretical risk of punitive tariffs on some goods under theoretical circumstances at some point in the future.

Jonathan Jones, former head of the government legal service, argued Mr Johnson’s argument that Brexit was all about regaining sovereignty is also flawed.

“The argument about ‘sovereignty’ is fatuous,” he tweeted. “It is sovereignty which gives the UK power to enter into any trade deal (or choose not to). The question is what’s the balance of benefits/obligations. If UK is not prepared to accept ANY obligations, well . . . ”

France’s President Emmanuel Macron with Ursula von der Leyen © Olivier Matthys/Reuters

The evolution mechanism would make it possible for both sides to agree on updating standards. Either side, as a last resort, could curtail access to its market if it could prove the level playing field was no longer assured.

Mr Johnson’s allies thought he had a deal last week on the issue but claim that Emmanuel Macron, France’s president, last Thursday insisted on a tougher mechanism; British officials said it would set a “very low bar” for retaliatory tariffs. They want to reset the negotiating clock to the start of last week.

While the EU side insists it did not table new demands, Mr Johnson’s aides argue the new proposal is overly prescriptive, undermining the country’s sovereign right to design its own regulations and allowing Brussels to “unilaterally whack us” without having to prove any “high level of harm”.

Mr Johnson has specifically criticised the “automatic” nature of such a mechanism, seen by some in Brussels as a hint he might be willing to accept a compromise including some kind of arbitration mechanism.

But as EU leaders met in Brussels on Thursday for their quarterly summit, one senior EU diplomat said the mood — as in Downing Street — was increasingly resigned to a “no deal”.

“There is frankly a lack of trust, a lack of energy and a lack of commitment to reach a deal,” the diplomat said. “We’re down to the bottom of our mandate and the aspects of that mandate that protect the EU’s internal market we won’t let go of — we can’t ruin the EU. So what can we do?”

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