- Prime Minister Boris Johnson has continued to rule out extension of trade deal talks beyond December 2020, despite Westminster’s cliff-edge fears.
- If a trade deal is not in place by the end of December 2020, the UK would trade with EU members on World Trade Organisation (WTO) norms – PM Boris Johnson.
The overhang of Brexit is still not letting the UK prosper. After Britishers handed over a stonking mandate to the Boris Johnson led Conservatives to fix Brexit deadlock as soon as possible in the December 12 General Elections, the Prime Minister’s vow to get a comprehensive trade deal in place by the end of December 2020 has further raised concerns over the prospects of the United Kingdom.
Experts from various professions, ranging from politics to economics, have said that getting a comprehensive trade deal negotiated by the end of December 2020 is impossible and also argued that it has also escalated the fear of a no-deal between the UK and EU, which would be a disaster for both the economic blocs.
The UK is all set to give effect to Brexit as on January 31, 2020. The government’s Brexit bill has cleared its first obstacle in the House of Commons, as expected after PM Johnson bagged absolute majority at in the recently conducted general elections. Parliamentarians voted 358 to 234 in favour of the Withdrawal Bill, which will now be sent for further scrutiny to the British Parliament.
Also, the Prime Minister is expected to ask the President of the European Commission to initiate intense trade negotiation within weeks, which has further escalated fear that EU would push Britain to another Brexit deadlock at the end of this year.
PM will host the President of the European Commission, Ursula Von Der Leyen, in Downing Street this week as he initiates the UK’s withdrawal from the EU bloc at the end of this month, which will kickstart a race against time to complete a free trade deal with the EU bloc within December 31, 2020.
Ursula Von Der Leyen, who is due to meet PM Johnson this week on January 08, 2019, has declared in a speech scheduled at the London School of Economics, that both sides may conclude trade talks by the middle of 2020.
Also, PM Johnson and his allies are quite bullish on securing a comprehensive trade deal within a period of less than a year. He has also continuously insisted that transition related to Brexit will not go beyond December 2020 and if the intended trade talks failed to materialise between both the economic blocs, the UK would trade with the EU member states on terms prescribed by the World Trade Organisation.
What next after January 31, 2020?
In case both the sides agree to formally take out Britain from the EU bloc as on January 31, 2020, it would proceed for a transition period which is scheduled to end on December 31, 2020.
However, during the transition period, Britain would effectively remain in the EU bloc’s free trade and customs union, but there will be no member from Britain in the European Parliament.
However, post-Brexit by the end of this month, the Prime Minister’s first priority is to secure a trade deal with the EU. Britain is seeking as much access as permissible for its goods and services to circulate freely within the EU bloc. But PM Johnson has made his stance clear that Britain must exit the EU's single market and customs union and get out of the jurisdiction of the European Court of Justice.
It would take months for both the sides to come together on a formal trade deal, as all remaining 27 member states of the EU and European Parliament have to participate in the negotiation. This indicates that formal talks will start in March 2020, which leaves lesser time for a comprehensive trade deal negotiation.
Meanwhile, PM Johnson has already vowed not to extend the transition period beyond December 2020. And, in the wake of no-deal formalised between both the economic blocs, Britain would face consequences of tariffs on the exports to EU member countries.
However, PM Johnson has stated that the UK is completely aligned with the EU rules and the agreement should be arrive at without any complexities. But many have pointed out that Britain is seeking a divorce from EU rules so that it can strike agreements with individual member countries, which would make negotiations more difficult, as it is not just a trade deal that has to be sorted but the UK has to agree on how it is going to engage with the erstwhile bloc on issues relating to security and law enforcement. Also, the UK is seeking a replacement of the European Arrest Warrant scheme and also has to negotiate agreements in a number of other areas where co-operation from both the sides is required.
There are a lot of things which have to be addressed, but time available is very low for such a humongous and tedious negotiation. This has raised eyebrows of many experts who are of the opinion that it is impossible to complete this comprehensive trade deal between both the parties in such a short span of time.
Also, domestic companies are again struggling to deliver a decent performance at the London Stock Exchange, which have recently outperformed thanks to a massive surge in the Pound Sterling. But the rally halted on the very same day that PM Johnson decided to bring a bill in the parliament which will prevent his government to extend the period for Brexit transition beyond the scheduled deadline. This has taken out majority of gains of domestically exposed companies, which they had accumulated, after the elections provided a stonking majority to support PM Johnson to deliver and end the Brexit deadlock.
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