Brexit Update: Time’s up

The alarm clock is ready to sound the end of the process, it may be time to weigh up the inevitable downsides of a no deal, says Neil Sherlock CBE, Chair of the French Chamber’s Brexit Forum

The ninth round of the EU-UK trade talks are taking place this week. This is the last scheduled talks which need to make significant progress on trade and other issues if a deal is to be agreed. We have of course had deadlines and more deadlines and deadlines broken during Brexit, but this time there is a real deadline with the transition ending at the end of the year.

When I did some teaching of A levels many years ago, one of the most important pieces of teaching I did was to help students work through how to complete all the questions they had in the time available. With less than one hundred days until the end of the transition – and the need for agreement and ratification – time available is very short. The mood music, even with the UK Internal Market Bill, has been a little more optimistic in the last week. However, even this is only about completing a thin trade deal – worse than being in the single market - and there is still a serious chance of no deal. I have been mulling whether the chances of a deal are to use the famous numbers 52-48 or 48-52?

There are three issues which still need to be agreed to make this thin deal happen – fish, state aid and the governance of the deal. The atmosphere has been made tenser with the UK Government admitting that the Internal Market Bill would break international law by unilaterally making changes to the Irish Protocol in the Withdrawal Agreement. This has united all five former Prime Ministers in opposition to it, including three Conservatives, Major, Cameron and May. Even with these distinguished voices it will get through the Commons, but the House of Lords is a different matter. The Government does not have a majority in the Lords and former senior Conservatives like Howard and Lamont have made clear their opposition – let alone Labour, Lib Dem and Crossbench peers – so the Bill will clearly be amended and sent back to the Commons. This just may underline that this was a negotiating tactic to demonstrate ‘toughness’ but in reality it is more like theatre, as the Prime Minister weighs up the concessions needed to land a deal. 

The Prime Minister is also struggling with the pandemic on a second wave, which will further slow economic recovery and weaken his and his Government further in the polls. These pressures clearly strengthen the case for doing a deal, however would concessions to align closer on state aid, for example, be interpreted as taking back control? If he and his negotiators could find a way of softening this for public consumption, it might land in a dispute mechanism which could have serious implications – such as fines or tariffs – if there was a breach of the agreement. Nevertheless, always looking at the outcome through a British lens misses the point of any deal, both sides have to agree, find it acceptable and feel able to sell it to often sceptical electorates. Elections in France and Germany in the not too distant future make this a test way beyond the Tory leaning British press and Red Wall voters.

Just as I once told one of my students that they should at home use an alarm clock to ensure they spent the optimum amount of time on each essay question, so the alarm clock for these trade talks will ring soon. I still think – just – say 52-48, that a thin deal will be done. However, business leaders will know that time could just run out. At that point the blame game will start, as the Prime Minister and his allies talk up the ‘Australian deal’ of following world trade rules and how this means that Brexit is now done. Those businesses now in this toughest of all economic and health times who ensured their No Deal plans were kept up to date will at least have mitigated some of the inevitable downsides. 

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