Brexit 5: No extension needed, we want Tim Tams!

By Laura Contin June 19, 2020 4:42 pm

Long-awaited “High-level Meeting” went…as expected

On Monday 15th June, Prime Minister Boris Johnson met (in a videoconference) the President of the European Council Charles Michel, the President of the European Commission Ursula von der Leyen, and the President of the European Parliament, David Sassoli, to take stock of the progress made so far in agreeing on the future relationship between the UK and the EU. Despite Boris Johnson insisting that the two sides were not “actually that far apart”, whatever that means, the two sides still remain at loggerheads on a set of crucial issues, including access to Britain’s fishing waters after the end of the transition period and the UK’s reticence to the so-called “level playing field” of rights and standards in any future trade relations – which would reduce opportunities for businesses both sides of the Channel to undercut their competitors. Both parties, however, agreed that a “new momentum was required” and that the priority is now put on intensifying talks in July to (hopefully) be able to ratify a deal before the end of 2020. At least one thing was agreed on: the need to agree.

…but Hey! Australian Tim Tam’s biscuits will be back in the UK at a “reasonable price”

Is progress slow because Britain’s priorities are elsewhere? May be! The first round of trade talks between the UK, Australia and New Zealand is expected to kick-off via video conference in the coming weeks. The British Government hopes that a trade agreement with Australia and New Zealand will support the UK throughout the recovery phase post coronavirus by opening new markets for businesses and creating new jobs, with the expectation that such a trade deal could increase UK exports by as much as £1 billion. But in a press conference earlier this week announcing the official start of trade talks, Boris Johnson joked about wanting to be able to trade McVitie’s Penguin chocolate biscuits in exchange for Australian Tim Tams. A sweet distraction.

Negotiations will carry on throughout the coming months, with the ambition of signing a trade deal before the end of the transition period on 31st December 2020.

.. Oh wait! “Zero chance” of UK trade deal with Japan until Brexit negotiations are complete

While the ambitions of Boris Johnson and his Trade Cabinet to sign trade deals with various countries are high, according to Bill Emmott, Chairman of the Japan Society of the UK and former editor-in-chief of The Economist, there is “zero chance of a UK-Japan trade deal until the EU-UK trade arrangements have been agreed”. Emmot said that Japanese companies have in the past treated the UK as “a gateway to Europe, as well as buying a lot of components from EU suppliers for their UK operations, so they have to treat the UK and EU markets as being essentially connected.” With little progress made in UK-EU trade negotiations, Emmott suggests that it would be frustrating for the UK’s financial services sector if the Japan deal were to be in any way affected by Brexit, since this industry stands to make important gains. The trade deal with Japan is expected to secure additional benefits in areas such as digital trade and providing support for the UK’s 5.9 million small businesses and will allow the UK and Japan to set new standards in areas of digital technology and e-commerce.

No Green Deal for the UK after Brexit

Greener UK, a coalition of 13 major environmental organisations, has raised concern over the enforcement of air pollution targets and chemical regulations as a consequence of Brexit. The regulatory divergence from the European Union’s standards that will apply as of 1st January 2021 is likely to weaken all areas of the UK environment, from air and water quality to agriculture and fishing. Despite the UK Government stressing its will to maintain high environmental standards and regulations in place under UK laws such as the Environmental Bill and the Agriculture Bill, the prospect of US trade deals mining environmental standards in imported food is looming, and with it its potential threats British citizens’ health.

So, what’s next? Here is a non-political take from leading think-tank European Policy Centre

Leading think-tank, the European Policy Centre (EPC) recently published a discussion paper on the remaining options available for the UK and the EU to secure a deal. With the recent decisive and final “no” from the UK Government on an extension to the transition period, three scenarios open up on the future UK-EU relation. First: An extension based on the wording of the Article 50 of the Treaty of the European Union (TEU): “can Article 50 only be used until either the entry into force of the Withdrawal Agreement or the withdrawing member state’s exit without an agreement by lapse of time?”. Second, an extension with a new mixed treaty. Third, a “bridging period” as part of a future relationship agreement. Concluding a mixed agreement is legally speaking the soundest option for a late extension, according to the EPC, but the lengthy ratification and the return of political disagreements will make this route very uncertain. So, in conclusion the only way to avoid a complete disaster would be, according to the EPC, for the UK to ask for an extension before 1st July as the only guaranteed way of securing more time. An extension later this year might still be possible, however by then, legal and political obstacles might undermine this path, both domestically for the UK and within the EU.

 The Whitehouse team are experts in the potential impact of Brexit, providing political consultancy and public affairs advice to a wide range of clients, not only in the United Kingdom but also across the member states of the European Union. More information about our Brexit experience can be found here, or, if you have any questions, please contact our Chair, Chris Whitehouse, at chris.whitehouse@whitehouseconsulting.co.uk

By Laura Contin June 19, 2020 4:42 pm

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