After nearly five years of Brexit crisis, the
European Union and the UK are making a final attempt to bring about a thin trade agreement, which will govern approximately one trillion dollars in annual
imports and exports from 2021.
The United Kingdom left the European Union in
January last year, but when it comes to informal membership - known as the
transition period - in nine weeks’ time the trade deal will kick in.
If a deal can be reached before the transition
period ends on December 31, the two sides will sign more than 1,000
international treaties that cover everything from smoked salmon and cheese to
car parts and medicine.
So far, there has been no success, although talks
in London and Brussels have progressed on unification texts, with each side
drawn differently so far. Sources said that economic fair play, fishing, and sticking
points remain to be settled for disputes.
There are three main scenarios for Brexit.
1. Deal This Year
Even if both parties deal with zero-tariff and
zero-quota trade, it will be slim.
There will be little scope for close integration
in areas such as services and regulations. Neither does it guarantee close ties
on many existing areas of tight cooperation, including foreign policy,
international security, and defense.
Although lacking in aspirations for both sides
after the 2016 Brexit referendum, such a narrow deal is seen as the most
financially beneficial option available so far. This would keep the internal market of the 450 million consumers' block open to the world's sixth-largest
economy, and vice versa.
With the second wave of the COVID-19 epidemic
through Europe, the bloc hopes to avoid more economic damage. Nevertheless,
with a deal, many British exporters expect disruption at the main borders with
the European Union in early
2021.
2. No Deal
British Prime Minister Boris Johnson eventually
decides that a narrow deal is not in his political interest and the United
Kingdom leaves without a deal - possibly between a line.
Following Johnson's bid to reduce the 2020 Brexit
divorce treaty, there are fears that London is doing what a European diplomat
said the Madman Theory - in reference to former US President Richard Nixon's
attempt to convince Moscow - He was irrational during the Cold War.
If negotiators fail to overcome technical and
political differences, Britain and the EU will revert to World Trade
Organization rules, including trade barriers.
Johnson says he wants a deal but has said
repeatedly that he is ready to leave without a deal - on so-called
"Australian terms" - if the European Union demands too many
concessions.
The EU does not have a free-trade agreement with
Canberra and such a system would bring Britain on par with China but is worse
than many developing countries such as Afghanistan or Mali.
The EU does not believe that a no-deal split will
end the tyrannical Brexit saga at the end of the year and a French diplomat
predicted that the chaos in commerce would soon force a return to negotiations.
The European Union also insists that if Britain
goes ahead with a plan to reduce its earlier divorce settlement to the particularly sensitive Irish border, it will not implement any new trade
agreements.
3. To Massey
With political understanding on both sides,
pressure from businesses leads to partial agreement on some areas at the last minute.
Partial bargaining - covering some key areas
where parties can compromise - can be temporarily implemented from EU MPs
should they run out of time?
Such a super slim deal, even thinner than
predicted under the first scenario, effectively escalates negotiations on
issues in 2021 and beyond.
This would give Johnson the sensitive political victory of giving a deal without going back on his promise not to lengthen
Britain's path out of the EU by 2020.
The extent to which both sides will be able to build
on such a half-hearted treaty will also depend to a large extent on how far
London will extend its new right to move away from EU standards.
In particular, it would risk risking a regulatory
wall with the UK to relax its own standards on animal and food security in
order to win a new US trade agreement with the EU market, which "global
Britain “Brexit is important to the agenda.
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