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'Incredibly difficult' for UK and EU to strike comprehensive deal in time left

It is hard to see how the sort of comprehensive deal the UK and EU say they want can be agreed without an extension, a new report by academic think tank UK in a Changing Europe has found.

The UK and EU are in the midst of trade talks
The UK and EU are in the midst of trade talks

The report, The Brexit Negotiations: A Stocktake, finds:

  • Time is short to conclude a deal (negotiators have set autumn deadline for ratification and implementation). The EU has never concluded a trade deal this quickly and if it involves tariffs, the EU argues, this would be even more time consuming.
  • The economic impact of leaving the EU at the end of the year with no deal in place – trading with the EU on WTO terms (what the government calls an ‘Australia-style’ deal) – would be serious.
  • The political ramifications of a no deal would be severe and strain relations between the two sides, making collaboration significantly more difficult.
  • There are real concerns about business readiness for the new trade regime with the EU (deal or no deal), especially as they will be dealing with the furlough scheme ending and are already in a precarious position trying to recover from the pandemic.
  • There has been some progress on meeting the UK’s commitments to have the arrangements agreed under the Northern Ireland Protocol up and running by the end of the year – but there remains a lot to be clarified and business will struggle to be ready.
  • Even with an extension, the gap between the two sides is currently very significant in key areas – level-playing field rules, fishing, security – and cannot be bridged without considerable movement by one or both, which they do not seem willing to move on.
  • Extending the transition after the June deadline will be legally very complicated and there is little guarantee it can happen.
  • It is hard to see how a new immigration system will be up and running by the end of the year. Should it not, this will have significant practical and reputational effects.

Professor Anand Menon, from the Department of European and International Studies and director of UK in a Changing Europe, said: “What this report shows is that it will be incredibly difficult to strike the kind of comprehensive deal both sides claim they want before transition is due to end at the end of December. This is as much about the incompatible preferences of the two sides as it is about time pressure per se.

“On a range of issues from fisheries to the level playing field, there remain serious differences of principle. It strikes me that the risk of the EU leaving transition without a trade deal are as high as they have ever been, albeit that it is still conceivable that one or both sides might compromise enough to get at least a ‘thin’ FTA completed by the end of the year.”

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Anand  Menon

Anand Menon

Professor of European Politics and Foreign Affairs