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The European economy is sounding the alarm at the lack of progress in negotiations on a trade deal between the UK and the EU after the Brexit transition period. “We are sleepwalking into the abyss,” the CEO of the business association Business Europe, Markus Beyrer, warned Monday in a statement.
Britain left the EU at the end of January but will remain part of the internal market and the EU customs union until the end of the year. To avoid a breakdown with tariffs and trade barriers, the EU and Britain are negotiating a follow-up agreement. The transition phase ends in three months. If an agreement is reached, it should be ratified by the European Parliament, the EU states and the British Parliament. So far there has been little progress in the negotiations.
Business Europe warns of the catastrophic consequences of a supposed no-deal. Given the complexity of the issues yet to be resolved and the little time left, the economy is alarmed. “Moving from full market integration to a no-deal scenario would have devastating consequences for companies already battling the effects of Covid-19,” Beyrer said. He called on both parties to show a willingness to compromise.
Prime Minister Boris Johnson’s Single Market Act could become the decisive obstacle in the negotiations. The EU accuses Britain of violating essential parts of the 2019 withdrawal agreement with this legislative proposal. Because it would lead to the erosion of the special rules for Northern Ireland, which should avoid a hard border with EU member Ireland. The EU calls for the plans to be withdrawn at the end of this month. It doesn’t look like that.
The dispute clouds the prospects for a follow-up agreement that will regulate trade relations between the two parties starting in early 2021. This should be negotiated again from Tuesday.
