Brexit negotiations

Brexit Update: Negotiations Going into Critical Phase

Kelsey Schenk - Marketing Officer
Kelsey Schenk
Marketing Officer

A new round of negotiations is scheduled for this month. In January, the United Kingdom left the European Union and it was agreed that a transition period would follow, so both parties could agree on a trade agreement between the two.

The transition period ends at the end of the year, but the period in which an extension of the transition period can be agreed on ends this month. In planning the negotiations, the parties designated June as the month to take stock of how far negotiations were along.

Can Boris Johnson Still Ask for an Extension?

Looking at the current state of the negotiations, there seems to be only one logical answer to the question, whether there should be an extension: Yes!

Another big question is: can Boris Johnson still do so, without losing face?

CNN reports:

Johnson, the architect of Brexit, has made such firm commitments to not extend the transition period that he simply cannot afford any capitulation -- especially with his mounting domestic issues. Weakness is not an option.

Johnson must now spend June with one eye on complicated and fraught negotiations with the largest trading bloc in the world, while also overseeing the response to the country's worst public health crisis in decades.

Theoretically, Johnson could buy more time if he wanted to go down this route. He has until June 30 to request an extension to the transition period. However, it would be so politically toxic that doing so currently seems unthinkable to Johnson's advisors. It's this toxicity of the Brexit debate that's making no deal more likely, as any perceived capitulation would land Johnson in trouble with his supporters.

On this same subject, The Guardian writes:

The UK has a one-off right to request an extension to the transition period to give a deal more time but Johnson has repeatedly said he will not do this.

Some believe this will lead to a last-minute narrow trade deal in October or November, but De Rynck [Barnier’s senior adviser] said this would still mean “disruption” on 1 January, warning car manufacturers they would have to restart their no-deal planning

Deal or No Deal

A positive outcome for the ongoing negotiations is extremely important. If both parties can’t come to a deal before the end of this year, the United Kingdom will still leave the European Union with no deal. A Brexit without a deal is still the worst outcome for both parties, but it seems to be worse for the United Kingdom.

CNN continues:

The EU has for some time believed it will cope with the no-deal shock better than the UK. "The EU knows it is in the stronger position. Yes, no deal is bad for them, but it's much worse for the UK," says Thomas Cole, a former EU negotiator. "It's true that both sides are sovereign equals but they are very aware that they don't need to make the kind of concessions the UK needs to make."

And just as it has in the UK, coronavirus might make certain no-deal calculations easier for the EU to swallow in the long run. "Paradoxically, it might make aspects of no deal more manageable for the EU," says Fabian Zuleeg, chief executive of the European Policy Centre. "Companies that were looking at having to downscale their operations across Europe post-Covid might decide it's easier to completely shut down UK offices and factories. It actually solves a few problems, in some respects."

Read the full article here.

Representatives of the European Union seem to be expecting the worst-case scenario to become a reality. 

Bloomberg reports:

“We’re not making much progress at the moment,” EU Trade Commissioner Phil Hogan told the European Parliament’s trade committee on Thursday in Brussels. “Perhaps the United Kingdom has come to the conclusion that there’s not going to be a deal.”

Negotiations on the future relationship resume next week with neither side expecting significant movement and the risks growing of a rupture at the end of the year.

“We have a spirit in the European Union to try and do a deal, but we’re not getting much traction from the United Kingdom negotiators to date,” Hogan said. “Perhaps this is more strategy than substance, but we certainly need confidence-building measures in the next round of negotiations next week.”

Read the full article here.

Business Insider reports:

“The chasm is both broad and deep,” an EU source close to negotiations told Business Insider.

“Increasing numbers here [in Brussels] wonder if the British Government wants a deal at all.”

This chasm was illustrated recently by a novel exchange of letters between the UK’s chief negotiator, David Frost, and his EU counterpart, Michel Barnier.

Frost, chosen by Johnson to lead the UK side, said the UK was “perplexed” by the EU’s approach, which he recently branded “ideological,” and that the trade deal Brussels was offering was unfair.

Barnier over the weekend told The Sunday Times newspaper that the UK needed to show “more realism” in talks, and accused Prime Minister Johnson of rowing back on commitments he signed up to during the Article 50 negotiations.

Boris Johnson to Visit Brussels

The negotiations are obviously entering a critical stage. So much so, that Boris Johson is even travelling to Brussels for the upcoming rounds of talks, according to the Times.

Reuters reports:

British Prime Minister Boris Johnson will resume Brexit talks in Brussels next month, the Times newspaper reported on Thursday.

Britain’s negotiator with the European Union, David Frost, said Johnson will meet the presidents of the European Commission and Council to formally assess the state of the talks, according to the newspaper.

Let’s hope this signals Johnson wants to come to an agreement, or at least wants to prevent a no deal Brexit at the end of this year by asking for an extension.

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