Tentative deadline for a post-Brexit deal to be reached
Today marks UK Prime Minister Boris Johnson’s self-imposed deadline for trade talks with the EU.
Negotiators must hammer out a deal within the next few weeks in order to leave enough time for the British and EU Parliaments to ratify it by the end of December. If no deal is agreed upon, trade between the EU and UK will revert to World Trade Organization rules, which includes steep tariffs. The issues dividing the British government and its continental counterparts remain the same since negotiations began in March—fishing rights in the English Channel, regulatory harmonisation and industrial subsidies remain contentious.
In the event of a no-deal scenario, expect another massive bailout from the British Treasury for industries facing both supply chain disruption and COVID-19 induced lack of demand. With the UK budget deficit already at a peacetime height, calls for a return to austerity policies of the Cameron years may resurface.
Considering this eventuality, and the failure of the government’s attempt to use the Internal Market Bill against Brussels, it is more likely that London will break the deadlock first by offering concessions. In any case, both sides remain prepared to keep negotiations open until the last possible opportunity.
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