Which are most difficult to sort out in a future trade deal between the UK and EU, goods or services?

Services are even more difficult than goods, and perhaps there is reason to hope that for agriculture, something may be sorted before the end of the year.

What are the prospects for the upcoming negotiations between the UK and EU?

It will be a difficult negotiation between two partners, one made up of 27 individual countries. It is normal in a negotiation for people to start by staking out their tough positions. Once you sit down, if you wish to succeed, there is give and take. In a negotiation, there are trade-offs, but we start from a position of over four decades of common rules with a special condition for the border on the island of Ireland where the EU and UK physically meet.

Who has the most power in the negotiations between the UK and EU?

There are more EU citizens than UK citizens, the EU economy is bigger, but the UK is a large country that trades a lot with the rest of Europe and nobody wants to throw that away. It is particularly important in financial services.

It doesn’t suit the EU to cut the UK off from financial services?

Of course not. The EU uses the city of London as a financial centre and the city of London does things that are not easy to replicate elsewhere.

This applies in many other sectors as well. For example, EU food businesses are intertwined across borders, cars are put together in different countries, as are the Airbus aeroplanes. We live in a global economy and certainly in an European economy

So both sides need the deal?

There is no doubt about that. It would be reckless and irresponsible to fail to agree, but that doesn’t mean they won’t, because it is going to be difficult. People are wedded to hard-line positions and there is a tight deadline.

Does the UK have to choose between the US or EU for a trade deal?

They will try to have both. There will be tough decisions on GMOs and chlorinated chicken, where standards are different and there are no signs that the EU or US will change their requirements. If UK food companies go ahead and import GMO ingredients, it means checks and delays at the border with Europe.

There will be hard choices from time to time. It is a triangular relationship between the UK, EU and USA, which is also a simplification, as there is the rest of the world as well.

Somehow, the UK, EU and US should find a way to reach an agreement about goods and services, otherwise we introduce friction into the system.