Brexit – Deal or No Deal By End of 2020?

Sep 7, 2020

Despite the fact that COVID-19 overtook global news in the last few months, Brexit kept the United Kingdom and Europe busy over summer negotiating legislation related to the UK leaving the European Union.

Even though Brexit took place over six months ago, both sides have been still in the process of discussing their complicated relationship. EU and the UK have until the end of the year to negotiate and establish their new regulations which will include everything from trade, access to fishing waters, security, etc.

Currently, the UK’s relationship with the EU is a transition period that occurred immediately after the Brexit day took place on 31st January. This means that at the moment the UK must still comply with EU regulations and follow the same trading regulations as before. On the other hand, the EU does not fall under the EU’s political institutions therefore it’s MPs do not have voting rights in the European Parliament. The deadline for this unique relationship is 31st December 2020.

Should there be no deal by the deadline, then the trading arrangements that are currently in place will expire and the UK will have to follow single market regulations. This means tariffs followed by countries not part of the EU will apply. Therefore, UK goods will be harder to sell and will be more expensive in the EU. The reason that there is yet no deal in place in because Prime Minister Boris Johnson just negotiated the withdrawal agreement rather than what will take place after.

At this stage, ministers are seeking new legislation to eliminate last year’s withdrawal agreement. The main objective is to alter the requirement for the arrangements with Northern Ireland customs, that were meant to cancel border checks. Border checks significantly increase the time needed for goods to get transported. Boris Johnson was accused of “backing out of” his previous promises by the Labor Party.

A new round of negotiations begins on Tuesday, and it will be the 8th time that the EU and UK seek to secure a deal to arrange for trading without taxes or border checks. However, just before the talks were about to commence, the Financial Times reported that an internal market bill would totally eradicate the legal capability of the Withdrawal Agreement “Boris Johnson, I thought, told us he had an oven-ready deal. And he fought a general election telling us he had an oven-ready deal. [This] now suggests that he was misleading people in that general election. And Parliament supported the Withdrawal Agreement earlier this year. He has made promises and signed a treaty around these arrangements for Northern Ireland, and he now seems to be backing out of that.”