The EU’s negotiating skills and unity will be put to a series of tests this year as the bloc seeks to thrash out a deal with the UK and minimise the impact of Brexit, conclude a trade agreement with the US, and finalise its long-term budget for 2021-2027.
Over the next months, Europe will keep its eyes on the calendar.
Donald Trump wants an agreement with Brussels before November, when voters will decide whether he continues as US president. European Commission President Ursula von der Leyen pledged in Davos in January that a deal could come “in a few weeks”.
The deal with the UK needs to be concluded by late October-early November, in order to leave time for parliamentary ratification.
A compromise on the Multiannual Financial Framework (MFF) should be in sight by April, when the draft budget for 2021 will be put forward or contingency measures should be considered, according to MEPs.
The consequences of failing to bring these talks to a successful conclusion risks affecting the European economy, worsening the transatlantic trade war and leaving the EU without the resources needed for its ambitious goals for this decade.
The stakes may not be as high as when the Europeans faced the risk of a euro break-up during the 2010-2012 and the Grexit threat in 2015. “The combination of the three issues does not represent an existential crisis like the one experienced during the crisis,” said Maria Demertzis, deputy director of Bruegel, a think-tank.
But these three negotiations will be crucial in the context of the “new dawn for Europe” that the EU’s top echelons proclaimed on Friday (31 January), on the occasion of the UK’s departure from the bloc.
“In an age of great power competition and turbulent geopolitics, size matters,” the three presidents, David Sassoli (European Parliament), Ursula von der Leyen (European Commission) and Charles Michel (European Council) wrote in an op-ed published on Friday,
To prepare for the negotiations and the intense political agenda, the three presidents met in Jean Monnet’s house near Paris, with their heads of cabinets and the secretary generals of the three institutions.
To be successful, “great coordination will be needed among the three institutions, that was the outcome of the presidents’ meeting”, a senior EU official said.
The clock is already ticking. February will be a busy month. The Commission will put forward its draft mandate to negotiate the future EU-UK agreement on Monday (3 February), to be adopted by the member states by the end of the month.
Von der Leyen is expected to travel to Washington in the next few days with an offer for Trump.
On 20 February, an extraordinary summit will “begin” to narrow the differences among EU leaders on the MFF.
But reaching a successful conclusion on any of the negotiations won’t be easy. The EU will face again the risk of a cliff-edge in its relations with the UK at the end of 2020. Meanwhile, Trump has threatened to impose more tariffs unless he gets “something”. Divisions among member states could deepen when the MFF talks enter into the details.
The EU is confident that agreements can be reached on the three fronts in parallel.
In the case of the future EU-UK trade relations, the complexity will depend on the UK’s divergence from EU legislation on labour laws, environmental protection and state aid, as that will determine the UK’s access to the EU market.
Irish Prime Minister Leo Varadkar told the British Chamber of Commerce that “you may have to make concessions in areas like fishing in order to get concessions from us in areas like financial services. That’s why things tend to be all in the one package.”
In the case of the EU-US deal, the bone of contention will once again be agriculture. EU negotiators believed they found a “backdoor” to overcome the stalemate from last autumn, when member states refused to include the farming sector in the negotiations.
The Commission is willing to review some of its regulatory barriers (sanitary and phytosanitary (SPS) measures), as long as Washington does the same.
The EU executive is also prepared to include some other goodies on energy and tech, possibly by increasing liquefied natural gas imports and boosting cooperation on 5G or tackling the forced transfer of technology imposed by China.
However, US Secretary of Agriculture, Sonny Perdue, warned in Brussels last week that easing the regulatory barriers for shellfish, apples and pears would not be enough, as the US wants to balance its $12 billion agricultural trade deficit with the EU.
A first step would be to open the European market to their chlorinated chicken and hormone-treated beef.
As for the MFF, it is hard to predict the result of the power struggle between the frugal member states and the ‘friends of Cohesion’, or among the Visegrad countries and governments in favour of the ‘Rule of Law’ conditionality.
Finally, the EU also wants to conclude an investment deal with China by the end of 2020.
All of that will show how efficient the EU is as a negotiator but also how determined it is to protect its unity,
Europe is still struggling with its own internal fractures that date back to the eurozone and the migration crises. The US, China, Russia and other powers have also tried the “divide and conquer” strategy with Europe in the past.
“Why does everyone want to divide us?” Sassoli wondered on Friday.
The fundamental question of last three years is – why do so many people want to divide us? In a world without rules the weakest are excluded and only the strongest prevail. We in the European Union do not want that. pic.twitter.com/XNPZvdFzoi
— David Sassoli (@EP_President) January 31, 2020
The level of unity the 27 members display in the coming months will determine whether Brexit brings a “new dawn for Europe” or a perennial sunset.
[Edited by Benjamin Fox and Zoran Radosavljevic]