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At this time last year we were inundated with rumors of a no-deal Brexit collapse. Now that conversation is back, in different circumstances, but with more reality about it.
The UK politically left the EU on January 31. On December 31, a commercial stoppage between the EU and the United Kingdom ends.
The hope was that by then a new free trade agreement between the EU and the UK would have been reached. But now, with 77 days to go, we are back on the brink.
EU leaders decided Thursday that negotiations should continue. But they also “called on the UK to take the necessary steps to make a deal possible.”
On Friday afternoon, British Prime Minister Boris Johnson published a video message in which he accused the EU of not seriously participating in the negotiations in recent weeks. He urged UK citizens to prepare for a no-deal outcome on January 1, which he said they would handle successfully.
But Johnson, in particular, did not rule out continuing the talks. At the same time, the president of the EU Commission, Ursula von der Leyen, said that the trade talks would continue and that the chief negotiator Michel Barnier would be in London next week for the ongoing negotiations.
Then shortly thereafter, Johnson’s official spokesman announced that it made no sense for his negotiator, David Frost, to meet Barnier in London next week.
“The trade talks are over: the EU has effectively ended them saying they don’t want to change their negotiating position,” Johnson’s spokesman said.
So does that mean an abrupt end to the Brexit talks? Maybe, and maybe not.
It seems there will have to be “conversations upon conversations.” We are back on the edge. It was always going to come to this.
First it was Canada, now it’s Australia
Yes, you have the right to be confused when the Brussels jargon goes global.
Boris Johnson has often spoken of a Canada-style deal with the EU after Brexit. But it is not entirely accurate.
The EU-Canada agreement, completed in 2017, removes most, but not all, of the duties or taxes on goods traded between them. It also increases quotas, the amount of a product that can be exported without additional charges. But it does not remove them completely.
Recently for trade in services and, in particular, almost nothing for trade in financial services. These are very important to the UK economy.
In fact, the post-Brexit trade deal between the EU and the UK, if it worked, was going to be much longer than that between the EU and Canada. We are talking about unrestricted access to a market of 450 million EU citizens at the doors of the UK.
References to Australia are even more boring here. It means a no-deal setup for trade like the EU currently has with Australia.
Australia mainly trades with the EU under the rules of the World Trade Organization. That means tariffs and quotas, big time, and very bad news for Irish exporters to the UK.
So that’s it, is the UK really collapsing?
The events of the past two days certainly increase that risk. But we are seeing the turning point in a serious game of poker here.
Many Brussels diplomats believe that a basic trade agreement can still be reached in the short time available. After the two-day leaders’ summit in Brussels, Taoiseach Micheál Martin said that a no-deal does not benefit anyone.
It is certainly not in the interest of Ireland, definitely not in the interest of the UK, and most of all not in the interest of the EU.
But we are back on the edge. So, look at this space.
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