An update on Brexit

An article by Lea Schiller

As the transition period of Brexit comes to a close, many are asking what future relations between the two might look like. Currently, the UK still has to abide by EU regulations – but next year, it will leave the Single Market, the Customs Union. The Withdrawal Agreement, which was signed in January of 2020, makes provisions for both the transition period and the UK’s outstanding commitments to the EU. It does not, however, regulate how future trade relations will look like; it is therefore crucial whether a new deal can be reached before the transition period comes to an end. In this article I intend to provide a short overview on the key events that have halted the progress towards a new trade deal between the UK and the EU.

Negotiations started in March, with the most important issues being access to the UK’s fishing waters and state aid to companies. Hopes for a deal took a hit in early September following plans for the Internal Market Bill in the UK. It would override parts of the Northern Ireland Protocol, which stipulates that goods passing through the Irish border will not need to be checked. The Internal Market Bill would give the UK the power to interpret the trade arrangements made for Northern Ireland, even though the Northern Ireland Protocol gives this power to a Joint Committee of representatives from both the UK and the EU (Edgington, 2020). If implemented, the Internal Market Bill would therefore be an intentional breach of international law; as the Northern Ireland Protocol is part of the Withdrawal Agreement between the UK and the EU. The reaction from the EU was accordingly firm. EU diplomats have described this bill as “shocking” (Moens, 2020), and potentially the first step towards a no-deal. In short, the negotiations have been far from an uncomplicated process.

Around the same time, Boris Johnson threatened to walk away from negotiations should there be no deal reached by the 15th of October (Landler & Castle, 2020), adding more fuel to the fire. As of the end of October 2020, no deal has been reached, but this is not the first time Johnson has demanded a breakthrough by a certain date, only to later backtrack on this; in February, he already threatened to walk away if no deal was reached in four months (Landler & Castle, 2020). The EU is pushing to continue negotiations but would only sign a new trade deal if the UK amends the Internal Market Bill to be in accordance with previously signed deals, such as the Withdrawal Agreement and the Northern Ireland Protocol.

In the midst of frustration and wide disagreements on cure issues, the scenario of a no-deal is a possibility that is steadily coming closer. In this case, the UK and the EU would fall back on standard WTO terms (Sandford, 2020) – a disaster for everyone involved. Compared to the Single Market of the EU, trade under WTO rules would mean tariffs and non-tariff barriers to trade that have not existed between the UK and the EU for years. A drop in exports and imports would then make a recovery from the current recession even more challenging, which is why these last few weeks of the transition period are so crucial.

photo by Rocco Dipoppa on Unsplash

References

European Council. (2020, October 21). EU-UK negotiations on future relationship. Retrieved from: https://www.consilium.europa.eu/en/policies/eu-uk-negotiations-on-the-future-relationship/

Edgington, T. (2020, September 8). Brexit: What is the Northern Ireland Protocol and why is it needed? BBC. Retrieved from: https://www.bbc.com/news/explainers-53724381

Moens, B. (2020, September 9). Brexit negotiations hit low after UK’s ‘carpet-bombing’ tactics. Politico. Retrieved from: https://www.politico.eu/article/brexit-negotiations-eu-uk-no-deal-withdrawal-agreement-irish-border-breach-international-law/

Landler, M. & Castle, S. (2020, October 16). With Brexit clock ticking, Boris Johnson vows, again, to walk away. The New York Times. Retrieved from: https://www.nytimes.com/2020/10/16/world/europe/brexit-boris-johnson-europe.html

Moens, B. & Herszenhorn, D. (2020, October 14). EU to Boris Johnson: Get Brexit done already. Politico. Retrieved from: https://www.politico.eu/article/brexit-saga-drags-on-as-uk-boris-johnson-wont-end-talks-after-eu-summit/

Morris, C. (2020, January 23). What is the Withdrawal Agreement bill? BBC News. Retrieved from: https://www.bbc.com/news/uk-politics-50125338

Riley, C. (2020, September 30). Brexit is back and the stakes are higher than ever. CNN Business. Retrieved from: https://edition.cnn.com/2020/09/29/business/brexit-negotiations/index.html

Sandford, A. (2020, October 26). Post-Brexit guide: Where are we now – and how did we get here? Euronews. Retrieved from: https://www.euronews.com/2020/06/11/brexit-draft-deal-first-of-many-hurdles-to-a-smooth-exit