Towards a no-deal Brexit?

Manal Lotfy , Tuesday 8 Dec 2020

The trade deal between the UK and the EU intended to regulate British relations with the bloc after 1 January looks likely to stumble at the final hurdle, writes Manal Lotfy in London

Towards a no-deal Brexit?

The mood in Britain and the European Union has suddenly become grim as hopes for a Brexit deal are shrinking and talks are hanging in the balance. 

Fundamental differences between the two sides remained as Al-Ahram Weekly went to press, with the main problem being how to reconcile Britain’s desire to wrest itself free of EU rules and the bloc’s insistence that no country should have access to its markets on equal terms when it is undercutting its high environmental and social standards.

A second issue is that the EU wants the toughest legal checks possible on Britain respecting any deal that does emerge.

The politically charged issue of fisheries also continues to play an outsized role. The EU has demanded access to UK fishing grounds that historically have been open to foreign trawlers. But gaining control of fishing grounds was a main issue for many of the Brexiteers who pushed for the country to leave the EU.

Both sides would suffer economically from a failure to secure a deal, but most economists think the British economy would take the greater hit, at least in the short-term, as it is more reliant on trade with the EU.

UK Prime Minister Boris Johnson warned on Tuesday that securing a deal at an imminent Brexit summit in Brussels would be “very difficult” but backed “the power of sweet reason to get this thing over the line.”

Asked if he would try to reach a deal right up until the last minute, Johnson said, “yeah, of course. We’re always hopeful, but you know there may come a moment when we have to acknowledge that it’s time to draw stumps and that’s just the way it is.”

The talks would have collapsed by now had the interests and economic costs at stake not been so large. Because the EU is an economic power with a market of 450 million people and Britain has major diplomatic and security interests beyond its own commercial might, the two sides want to explore every chance of getting a deal rather than becoming acrimonious rivals.

However, if the EU’s conditions are too much for the UK to swallow, Johnson said he would be willing to leave the transition period without a deal. “We will prosper mightily under any version, and if we have to go for an Australian solution, then that’s fine too.”

Australia and the EU do not have a free-trade deal, and there are tariffs on Australian goods entering the bloc, including 48 per cent on lamb and 84 per cent on beef.

“We’ll do our level best, but I would just say to everybody – be of good cheer, there are great options ahead for our country on any view. But the key thing is that on 1 January, whatever happens, there’s going to be change, and people need to get ready for that change,” Johnson said.

Irish Foreign Minister Simon Coveney, speaking for his country which stands to lose a lot in case of a no-deal Brexit, told the Irish RTE broadcaster on Tuesday that “we’re in a difficult place as we try to close it out.”

Rhetoric aside, everyone knows that a deal, no matter how thin, would be better than no deal. After a phone call on Monday evening lasting for more than an hour with European Commission president Ursula von der Leyen, Johnson agreed to travel to Brussels for face-to-face talks.

In a joint statement, the two leaders said that in the coming days they would hold a make-or-break meeting. Sources on both sides pointed to Wednesday or Thursday morning as the most likely time.

EU leaders will also meet on Thursday, when they could sign off on an agreement or trigger preparations for a no-deal outcome, including temporary legislation to keep plans in the air between the UK and continental Europe.

UK Chief Negotiator David Frost joined Commission officials on Tuesday morning to prepare a document for Johnson and Von der Leyen on outstanding issues over fair competition, EU access to British fishing waters and the terms of a dispute-resolution mechanism in the event of treaty breaches.

German European Affairs Minister Michael Roth said the result of the summit meeting would depend on the UK government’s “political will” to seal a deal.

 “It is good that every effort is undertaken to find a sustainable and good solution. We want to reach a deal but not at any price. What we need is political will in London. Let me be very clear: our future relationship is based on trust and confidence. It is precisely this confidence that is at stake in our negotiations right now,” Roth said.

EU sources said that EU leaders would demand steps to protect EU interests in freight and aviation if talks between Johnson and the European Commission president fail. At the same time, British officials denied their government’s intention to extend the negotiations beyond 1 January 2021.

Britain and the European Union now have very little time to reach a trade deal. This deal, which Johnson once said would be “the easiest in history,” appears to be exceedingly difficult, with real fears now that it could stumble at the last hurdle.

*A version of this article appears in print in the 10 December, 2020 edition of Al-Ahram Weekly.

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