It is decision time, or do-or die week, for the talks between the UK and the European Union on the so-called Brexit, the UK’s decision to leave the European Union.

While we have heard that many times before, this time is really decision time.

To be sure, Boris Johnson, the British prime minister, is the one who set mid-October as a deadline to reach a trade agreement with the European Union, threatening that he would not hesitate to walk away from the negotiations if they stumbled.

But the self-imposed deadline by the British government is a double-edged sword. It could focus minds on reaching a comprehensive trade deal between London and Brussels, but it could also lead to the collapse in the negotiations if the two parties are unable to reach an agreement in the coming few days.

On Tuesday, British negotiators started a new session of talks in Brussels, with these being as difficult as the first ones.

Johnson has long billed the two-day EU summit that starts on Thursday as the ultimate deadline. But the 27-nation EU is willing to go on until November to craft a deal, however basic, that could still save hundreds of thousands of jobs and prevent an even worse economic crisis than the coronavirus pandemic has already wrought.

On Monday, Johnson’s Spokesman James Slack, said the UK still viewed this week’s talks as crucial. “Time is in short supply,” he said. “We will work as hard as we can to see if we can get an agreement.”

The urgency was highlighted by weekend phone calls between Johnson and French President Emmanuel Macron and German Chancellor Angela Merkel. EU Commission President Ursula von der Leyen and Charles Michel, the EU Council President, called other EU leaders to make sure the bloc remained united.

The prospect of a no-deal Brexit terrifies the financial sector and industries in the UK. British businesses have warned that they cannot prepare for a no-deal Brexit in the middle of a pandemic as many firms are already clinging on during the coronavirus crisis and have no capacity to contemplate failure in talks with the EU.

There are fears that the UK’s professional services industry is at risk of losing £225 billion in value because of Brexit.

A report by the UK House of Lords EU services subcommittee, published on Tuesday, said Britain’s professional firms, including accountants, lawyers and recruiters, have largely been ignored in negotiations with the EU.

It concluded that even if the UK secures a “Canada-style” trade deal, the industry could still face a loss of jobs and contracts unless a bespoke agreement could be reached with Brussels.

Baroness Donaghy, who chairs the committee, said that “more than four and a half million jobs depend on this sector, and it contributes almost £225 billion to our economy. This sector, and the people who depend on it for their livelihoods, will suffer if its needs are not reflected in the UK’s negotiations with the EU. We are concerned that they have been overlooked.”

So far, financial-services firms in the UK have moved 7,500 employees out of London and more than £1.2 trillion pounds’ worth of assets to the EU ahead of Brexit. In a report tracking 222 of the largest financial firms in the UK, accounting firm EY said that at least 400 relocations had occurred in September alone and that many more were expected in the following weeks.

EU member states have experienced a jump of 2,850 financial-sector positions since the 2016 Brexit referendum, with Dublin, Luxembourg and Frankfurt seeing the biggest gains.

US banks such as JP Morgan Chase are planning to move up to €200 billion (£184 billion) in assets from the UK to Germany due to Brexit. According to the US news service Bloomberg News, JP Morgan Chase will shift funds to a Frankfurt-based subsidiary by the end of this year.

US banking giant Goldman Sachs is also reported as planning the transfer of an additional 100 staff to Europe. From 2021, UK financial institutions and firms will have to rely on the EU granting them “equivalence” to continue operating in the bloc after the end of the transition period.

Meanwhile, two major foreign car manufacturers have called on the UK government to reimburse them for additional customs charges if it fails to reach a Brexit deal with the EU.

Japan’s two biggest carmakers, Toyota and Nissan, want the UK government to cover an expected 10 per cent tax on car imports from Britain that the EU could impose in the event of a no-deal Brexit, the Nikkei financial daily reported on Monday.

The pain is not only being felt in London. In Paris, the pressure also increased with yet another warning for businesses to prepare for a drastic rupture, possibly without a deal.

The pessimism comes because even after months of talks Britain and the EU still appear to be deadlocked on key issues of fishing and rules to ensure fair economic competition. “Intensive discussions continue in Brussels this week,” said EU Commission Spokesman Daniel Ferrie, refusing to elaborate.

Negotiating teams led by Michel Barnier on the EU side and David Frost on the British side have struggled for months to make progress but have three fundamental issues left to deal with.

The EU wants to make sure British firms will not go low on regulation and high on subsidies to undercut EU companies if any deal on zero tariffs and zero quotas is agreed upon. “Our position is clear and steadfast: if there is no level playing field, there is no access to our market,” said France’s EU Minister Clement Beaune.

The other crucial issue is about fishing rights, which affect only a fraction of GDP on both sides but have gained symbolic heft. Britain demands the right to control its waters fully, while France and others have big fishing industries to accommodate.

Britain has made it legally binding that it will not extend the transition period beyond 1 January 2021. The EU has said that any agreement will take about two months for legal ratification, translation and approval from the EU parliament to take place, making an effective cut-off date of around 1 November.

When Johnson was elected in December 2019, he promised British voters a new “global Britain free from the shackles of the EU.” Thus far, he has not delivered on his promises, and the coming weeks will determine his legacy and Britain’s future in an increasingly uncertain world.

*A version of this article appears in print in the 15 October, 2020 edition of Al-Ahram Weekly