Submission or No Deal: where do the Brexit talks end up this year?

Submission or No Deal: where do the Brexit talks end up this year?

It’s hard to see how there can be a bespoke agreement by December

If it was going to happen, it would have done so months ago. Confirmation yesterday that Britain would not exercise its right to request an extension to the Brexit transition period was one of the more predictable events of 2020. Despite the ravages wreaked on the UK economy by the Covid-19 pandemic and the shutdown it necessitated, the danger of a No-FTA exit creating yet more barriers to trade and growth was always one the government was going to accept.

Partly that’s a function of the calendar. When Britain requested the Article 50 extensions in 2019, it did so with only days or at most weeks to spare. The issue was clearly critical and the danger of No Deal all too real. That’s not the case now, especially when most people are distracted by the pandemic. (Not that it would matter even if people were paying attention: Johnson’s 80-seat majority and the purge of the Europhiles has seen to that). The requirement that a request be made at least six months in advance was of itself almost enough to ensure it wouldn’t happen.

The one exception might have been the outbreak of the pandemic. That really did hit the ability to negotiate, as well as dominating the focus of No 10. The changed circumstances were a legitimate unforeseeable reason to pause things for a year. However, once March and April came and went with the plan remaining as before, it was clear that December 2020 was indeed the deadline.

There’s a real risk though that observers – and perhaps the government – might be misled by what happened last year. Those talks could be rushed at the last minute to a conclusion. True, Britain ended up accepting a lot of what the EU wanted but the deal could still be signed and sealed within weeks at the end of the year. Trade talks do not work that way.

Whether by accident or design, Britain is probably now in a position where it will have to accept almost the entire EU negotiating position or refuse a deal. Even if the EU was flexible enough to accommodate Britain’s demands – which is unlikely given their statements so far – the timeframe to have something new translated through two dozen languages of legalese and ratified (remember, we’re now outside the A50 process).

That almost certainly means there won’t be a deal. The EU’s demands on ‘level playing field’ conditions, plus totemic issues like fisheries should make it impossible for the UK to sign up. In truth, that would probably be the case whether or not there’s an extension. Still, the Commission is surely likely to stick even more rigidly to its mandate if it thinks that the economic pressure is even more on the UK side – which a 25% year-on-year drop in monthly GDP suggests it will be.

Will that matter? Oddly, the carnage that Covid-19 is doing could well mean that politically, the effects of Brexit finally happening in a meaningful way are much smaller than the pandemic and, as such, hard to discern. In the short term then, the public may well have bigger things to be concerned about and, once again, the ex-Remain camp will be accused of scaremongering.

That won’t be the end of the story of course. Britain probably won’t have the infrastructure ready for January 2021, either in respect of Ireland or the continent, there will still, ideally, need to be a trade agreement concluded and starting from a lower baseline might enable that more limited deal, and there’s also the question of Britain’s trade deals with other countries (which was one of the reasons for leaving in the first place).

But it will be the end of the long Brexit process. Worth it?

David Herdson

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