1. We are currently staring over the precipice of no deal. Everyone, including many of those who argued for Brexit, understand the damage it would do, especially at the same time as the Covid economic crisis and the end of the transition period. We are facing a perfect storm.

2. It’s pretty clear now that the level playing field is the cause of the deadlock. It seems that the UK and the EU have already agreed a non-regression clause – ie that both sides won’t reduce existing standards on things like environmental protection and workers rights.
3. But the issue is what happens if EU standards diverge from ours in the years ahead and vice versa. In other words, how do you make sure that the playing field that both sides run out onto on 1 Jan remains level in the years ahead?
4. In the Political Declaration both sides signed up to robust level playing field commitments to “prevent distortions of trade and unfair competitive advantages.” That’s why both the UK and the EU should want a mechanism for ensuring that the terms of trade remain fair.
5. The other consideration is that trust was undermined by the row over the Internal Market Bill. Seeking to renege on part of a Treaty you negotiated a year ago is not a very good idea, especially when you’re trying to negotiate a new Treaty with the same partners now.
6. The areas of dispute are these. How do you identify whether different standards are in practice affecting fair competition? Who decides? And at what point in the process can one side take action against the other to ‘re-level’ the playing field?
7. The other issue is that because this arrangement will last for a very long time, both sides are trying to protect their interests and guard against something happening in future which they don’t want.
8. One way of avoiding the problem for now would be to have a review clause; ie an agreement that after say 5 yrs both sides could look at these LPF rules and the link to the degree of access that the UK has been given to the EU single market and decide whether they are working.
9. This would allow time to see whether the concerns – the UK view of sovereignty on the one hand and the EU fear that the UK will gain a competitive advantage over German, French and other countries’ firms on the other - is really something that we need to worry about.
10. Both sides need a deal - after all jumping off a cliff isn’t going to be good for anyone.
What’s needed now is a willingness on both sides to sort this out in the interests of all our futures.

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