Post-Brexit difficulties

Monday, 2020-01-13 17:01:44
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British PM Boris Johnson speaking at the meeting of the UK's House of Commons on January 8. (Photo: Reuters)
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NDO – The UK’s House of Commons has just approved Prime Minister Boris Johnson's Brexit deal, paving the way for the United Kingdom to leave the European Union (EU) on January 31.

However, while Britain’s divorce from the EU has fundamentally come to an end, analysists and leaders from the two sides are concerned with the difficulties of post-Brexit negotiations.

With 330 ayes and 231 noes, the British House of Commons ratified PM B.Johnson’s Brexit deal, which will allow the divorce to be implemented in late January after three years of delay.

After the UK officially leaves the EU, the two sides will negotiate a trade deal for the transition period until the end of 2020. Under the PM B.Johnson’s deal, London can propose an extension that lasts between one to two years. However, Johnson recently confirmed that there might be no extension of the transition period and is even preparing a bill to prevent such a move. The British PM’s determination means that it will only take 11 months for the negotiators from the two sides to sign a trade deal. Many experts have said that the negotiation for the UK – EU trade arrangement in such a tight timeframe is "an impossible task".

If there is no trade agreement between the UK and the EU in 2020, the UK and the EU's huge common market will have no obligations to protect jobs and the interests of businesses from both sides. The UK and the EU are major trading partners of each other, so in the case of bilateral trade negotiations facing obstacles, the socio-economic consequences for both sides are profound and enormous. For instance, around 460,000 jobs in Germany, the largest economy in EU, are dependent on exports to the UK. According to research results of the German Institute for Employment Research (IAB), the UK is now the fifth largest trading partner of Germany in the field of exports.

In addition, the “land of fog” is also a very important export market for the automobile manufacturing, mechanical engineering, chemical and pharmaceutical industries in Germany. Therefore, an uncertain and long-running post-Brexit trade negotiation will have a huge negative impact on the German economy. On the other hand, losses for the British side are expected to be even greater.

Last weekend, President of the European Commission (EC) Ursula von der Leyen forewarned that the UK could lose their right to access the European market if the country does not extend the timeframe for the negotiation of bilateral trade agreements that are now expected to last until the end of 2020. Earlier in her speech in the European parliament. Leyen said: “The timetable ahead of us is extremely challenging. In case we cannot conclude an agreement by the end of 2020 we will face again a cliff-edge situation. This would clearly harm our interests, but it would impact the UK more than us”.

The EC’s president also noted that if the transition period cannot be extended beyond the end of 2020, it will be extremely difficult for the two sides to agree on all of the aspects in their partnership and so they would need to select the areas with the most priority for negotiations. According to the EU's chief Brexit negotiator Michel Barnier, The UK is a member of the EU in 600 international agreements, which expires at the end of the year when the transition period for Brexit expires. Therefore, the timeframe of 11 months to negotiate is considered too short for the negotiations of 600 agreements.

In this context, the EU outlined three prior areas for the negotiations with the UK. Firstly, the priority will be given to negotiations to create a structure where the EU and the UK continue to meet regularly to coordinate their interests in climate issues, peace in the Middle East, among others. Secondly, the EU and the UK will work closely with each other on security issues to combat terrorism, cybercrime, threats from foreign powers and so on. Thirdly, the two sides will discuss and agree on a far-reaching trade agreement, including fishing, which is based on the UK's compliance with EU labour law, environmental standards, tax levels and state aid. Meanwhile, PM Boris Johnson said the British Government could seek a piecemeal post-Brexit deal with the EU that leaves some issues unresolved but still lets it break free from the bloc at the end of the year.

Although the Brexit process has finally escaped from its standstill, difficulties and worries seem to continue to "cling" to the UK and the EU in 2020. If the two sides do not select prior areas for negotiations and reasonable concessions to break or delay bilateral trade agreements, their economies could be battered by the post-Brexit.