UK Prime Minister Boris Johnson set a deadline of mid-October for a post-Brexit trade deal to be reached between the UK & EU, so what is happening?
There used to be a time when Brexit dominated news headlines and was pretty hard to escape and was it not for COVID-19, that may still largely be the case. Post-Brexit trade negotiations between the UK & EU have though been going on throughout much of the year and the topic of Brexit could soon become much more prominent in the news once again.
What are the negotiations all about?
The UK is currently in a transition period and has been since its formal withdrawal from the European Union on January 31, 2020. During this time, the UK can negotiate a future relationship with the EU on issues such as trade.
During the transition period, not much is different from when the UK was a member of the EU and the UK remains part of the EU customs union and single market. Travelling to and from the EU, freedom of movement and UK-EU trade have been almost unaffected so far. The main difference during the transition period is that the UK is no longer part of the EU’s political institutions such as the European Parliament and the European Commission. During the transition period, the UK follows the EU’s rules but will not have any voting rights to take part in decision-making processes in the EU.
Negotiating a trade deal can make trade between both sides simpler and potentially cheaper than if there was no deal in place.
How have negotiations been going?
Negotiations have been taking place throughout much of the year. Many warned that it would be unrealistic for a deal to be agreed and signed off between the UK and EU before the end of the transition period on December 31, especially with the Coronavirus pandemic overshadowing negotiations. Despite calls for them to do so, the government refused to request an extension to the transition period – as a result, if no deal is signed off by the end of the year, there will be a ‘no deal’ scenario – we’ll look at this in more detail later.
Both UK Prime Minister Boris Johnson and EU Commission President Ursula von der Leyen have agreed on the importance of finding a deal, however, with less than a week until the deadline set by Boris Johnson, there are said to be differences remaining on important issues.
Some of the key areas of difference during the negotiations have been;
- The so-called ‘level playing field’ – this involves measures to ensure that businesses on one side don’t have an unfair advantage over their competitors on the other side. This is a pretty standard measure, however, the UK isn’t keen on sticking closely to EU rules and regulations, with Brexit supposedly meant to be breaking the UK free from much of these.
- Fishing – yes, you read right. Fishing is only a tiny part of the picture in terms of the economy, but politically it means quite a lot. The UK would like to see its fish in the EU market – in return though, the EU wants to fish in UK waters, something which the UK doesn’t want to happen. It may seem a strange thing to hold up negotiations, but fishing was a significant part of the Leave campaign in the 2016 EU referendum.
- Internal Market Bill – there are also concerns about the UK Government’s proposed Internal Market Bill, which could allow the UK to break international law and override parts of the Withdrawal Agreement that saw the UK leave the EU in January this year. The UK has so far refused to remove parts of the bill as requested by the EU, which could cause problems in negotiations.
A meeting held between EU chief negotiator Michel Barnier and UK Brexit negotiator Lord Frost was ‘useful’, according to Downing Street – informal discussions are set to take place in Brussels next week as both sides try to find a deal.
What happens if a deal is agreed?
If a deal is agreed between negotiators on the two sides, it would then be discussed at an EU Summit.
The European Council Summit is a meeting between EU leaders and the next one is scheduled to take place in Brussels on 15 & 16 October. At the Summit, topics including COVID-19, relations with the UK, climate change and relations with Africa will be discussed.
Boris Johnson has previously said that both sides should “move on” if nothing is agreed before the EU Summit. Given this, it seems unlikely that negotiations will continue beyond this point, however, another Summit might possibly be held a few weeks later if the UK agrees to extend negotiations and then agrees to a deal.
If negotiations are successful and a deal is agreed, it would then go through the legislative processes in the UK and EU ahead of the end of the transition period on December 31, 2020.
What happens if there is no deal?
If there is no deal, the UK and EU would have to trade under World Trade Organization rules. This would mean that tariffs would be placed on goods and that goods would be subject to extra regulatory checks at borders. As a result, goods would most likely be more expensive and harder to access, potentially impacting food and other essential supplies. At a time when many businesses are already struggling badly because of the Coronavirus pandemic, the prospect of a no-deal to many businesses is not a welcome idea.
You may have heard about lorry parks and large queues at ports – much more paperwork and processing will have to be done before reaching the border and at the border, which, if firms are not prepared, could lead to some trucks queuing for two days through Kent, according to reports.
Security and intelligence sharing may also be largely stopped and transport between the UK and EU could become more difficult, with questions over operating licences for UK airlines.
There are though some that support the idea of a no-deal, considering it to be a ‘real Brexit’ – though there is significant debate over what type of Brexit the public actually voted for in the 2016 EU Referendum.
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