Time Running Out for the UK and EU to Agree on a $1 Trillion Brexit Trade Deal

By Adriaan Brits Monday, November 30, 2020

Both the United Kingdom (UK) and the European Union (EU) have voiced their concerns that time was running short for a Brexit trade deal. It seems that the two sides still can’t agree on the final details of a trade agreement as the December 31 Brexit deadline looms.

Running Out of Time

Over the weekend, both sides came out with the same message — we’re running out of time. Britain is set to exit the European Union on December 31 upon the end of the informal membership, and the two are in a hurry to strike a $1 trillion trade deal.

Boris Johnson said the UK prefers to strike a deal with the EU, but that the country would prosper without a deal as well.

“We really are now running out of time. This is the crucial week -- we need to get a breakthrough,” British Environment Secretary George Eustice said. He added that if developments were made this week, then we could see an extension in negotiations.

On the other hand, the European Union voiced similar thoughts.

“We are running out of time here,” said Irish Brexit supremo and Foreign Minister Simon Coveney. “The truth of Brexit is now being exposed in terms of the challenges of it.”

The EU and the UK are expected to approve new trade deals and sort them out in their own parliaments before the end of 2020. If they fail to agree on these deals, that could result in a no-deal, which would raise costs and barriers for exporters from both sides.

European Commission's Head of Task Force for Relations with the United Kingdom Michel Barnier said the days for further negotiations were numbered, and there are no guarantees whether the talks will be successful or not.

"Without London taking the necessary decisions quickly, reaching a deal will be all but impossible,” a diplomat from the European Union said.

Three areas — state aid, fishing, and how to face future disputes — seem to act as stumbling blocks. In these areas, almost no progress has been made over the past few weeks. When it comes to fishing, Britain and the EU are still far from reaching an agreement, said French official Clement Beaune.

"The British need a deal more than we do. The Europeans must be confident of this, and confident of their strength in this negotiation,” Beaune said.

If, on the other hand, the negotiators strike a deal, the EU and the UK would govern almost $1 trillion in yearly trade and reinforce peace in Northern Ireland, but disruption is expected at the most active border points between the UK and the EU.

Optimism That a Deal Can Still Be Reached

Two head negotiators, including EU’s Michel Barnier and Britain’s David Frost, talked again on Sunday in order to make progress.

“David Frost had made clear that we’re continuing the negotiations because we still think there is a prospect that we can get an agreement and while there is we should persevere with those,” Eustice said.

The British Foreign Secretary Dominic Raab said that the two sides are now in the last phase of negotiations, and there are just a couple of weeks to strike a potential deal. Whether progress will be made or not depends on bridging differences over a small number of issues, added Raab.

On the other hand, the President of the European Commission Ursula von der Leyen said these days are decisive when it comes to negotiations and added it’s still unclear whether the two sides will strike a deal.

CNBC reports that according to an EU source, the breakthrough in negotiations depends on the phone call between Boris Johnson and Ursula von der Leyen.

Summary

Time is running out for the European Union and Britain to strike a potential $1 trillion trade deal as negotiators are striving to agree on a few areas like fishing and state aid before the UK leaves the EU on December 31. In the case of a no-deal scenario, exporters from both sides are set to face higher costs and barriers.

About the Author


Headshot for author Adriaan Brits
As an analyst of global affairs, Adriaan has an MSC from Oxford, with diverse interests in the digital economy, entertainment, and business. He is a specialist trainer in Advanced Analytics & Media.

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