Conflict Alerts # 202, 10 December 2020
Harini Madhusudan In the news
On 9 December, Boris Johnson flew to Brussels and met with European Commission President Ursula von der Leyen for to save the deal. According to initial reports, both sides remain "far apart." The WSJ stated that the talks between the both, "ended without breakthrough Wednesday night with both sides saying they would decide on the future of the talks by Sunday." The BBC quoted a Boris Johnson spokesman stating: "Very large gaps remain between the two sides and it is still unclear whether these can be bridged."
On 7 December, the UK government announced Boris Johnson visit, amid growing apprehension on both sides that the Brexit trade talks will fail. The announcement came a day after the UK and EU resumed negotiations and stated that the trade talks 'has reached a critical stage.' On 10 December, the EU leaders are expected to meet in Brussels for a two-day summit where they could sign off a deal if the two sides reach an agreement.
Also on 7 December, the UK introduced the Internal Market bill that would allow the UK to override elements of its original Brexit treaty with the EU. The bill sought to reinstate controversial parts that the House of Lords have already voted to scrap. However, on 8 December, the UK government declared an "agreement in principle," with the EU to drop the controversial parts of the bill that would be seen as a breach of international law.
Issues at large
First, the sticking points between the UK and Europe. After ten months of negotiations between the two, significant differences remain regarding the fishing rights in the UK waters and the clauses for a 'level playing field' with terms for market protections. The EU expects the UK to adhere to its rules on workers' rights, environmental regulations, and state aid. Concerning the fishing rights, the EU has warned the fishermen will no longer have special access to the EU market to sell their goods, without the ongoing access to the UK waters for the EU fleets. The EU also insists on a set of shared rules and standards to ensure businesses in one country do not have an unfair advantage over their competitors in others. Additionally, the two sides disagree on how any future trading disputes would be resolved.
Second, time is running out. In the likelihood of the EU and UK reaching a deal, the proceedings would have to be turned to legal text and translated into all the EU languages which would then be ratified by the EU Parliament, all before 31 December 2020. Within the UK Parliament too, the MPs would have to vote on the legislation implementing the parts of the deal reached. With time running out, the uncertainty surrounding the future of the negotiations has put the two sides in a fix.
Third, the UK and the EU have hardened their stances over the past months, both sides standing by their positions. The deadline of 15 October, set by Boris Johnson, is long gone and the situation remains tricky because the two sides have been unable to reach a common ground. The UK argues in favour of retaining control over their sovereign decisions, and the EU expects the UK to abide by the common standards of the region. Through the process of the negotiations, the parties have ensured not to step away from their demands. The situation was made tougher after Boris Johnson took charge of the process.
In perspective
If both fail to reach an agreement, the trade between them will not change overnight. However, the prices of many goods would increase in the UK, the free movement of labour would be affected, travel rules will change, and the UK will likely apply a points-based immigration system. Businesses trading will involve more paperwork and would make the movement of goods more challenging. On the flip side, the UK will have more freedom to strike deals around the world. The UK, as part of the EU, had trade deals with more than 70 countries. Since leaving in January 2020, it has struck similar deals with at least 50 of them.
The introduction of the UK internal market bill was untimely and had seen the EU launch legal actions against the UK. The decision by the MPs to vote down the changes to the bill can be seen positively.