Report Contents

December 23, 2020


UK/EU: Deal or delay?

BY Carsten Nickel

Share on twitter
Share on whatsapp
Share on facebook
Share on linkedin
Share on email
Share on reddit

Listen to our reports with a personalized podcasts through your Amazon Alexa or Apple devices audio translated into several languages

( 3 mins)

Speculation has been growing that a post-Brexit trade deal will be announced before or on 24 December. In true Brexit fashion, however, earlier expectations for an imminent presentation of a deal turned out to have been too optimistic. As discussed in the past, a deal before year-end remains the most likely outcome, and the only deadline that matters is 31 December.

If an agreement were to be presented within the next 24 hours, this would leave mainly two working days for formal sign-off on the European side, 28-29 December. The deal would be presented to member states’ EU ambassadors, upon which EU capitals could sign off on the deal in written procedure (i.e., without any in-person meeting on ministerial level). In the UK, a vote in Westminster could be held on 30 December. Under EU law, the deal could come into force provisionally on 1 January, followed by European Parliament sign-off in the new year.

Over recent hours, speculation about an immediate deal was growing, only for this to get delayed yet again. As demonstrated by these developments, even during the holidays and over the subsequent three working days before 31 December, the possibility of some very last-minute drama should still not be discarded – even if there is a deal within the next 24 hours. The analysis of any deal by the 27 EU member states probably poses the biggest risk. Especially the obviously political numbers around fish – rather than technically more complex issues such as level playing field enforcement – should once more be watched for potential attempts to alter them ever so slightly on the very last meters.

In the UK, meanwhile, opposition from within the ruling Conservative parliamentary party will probably be less of an issue. One reason is the hard Brexit ahead under the zero tariffs/quota deal. Another factor is PM Boris Johnson’s, after all, still comfortable majority. The relatively short time span available for analyzing any deal might ultimately be a positive. Until then, however, complaints about the short time span might be noisy. The most committed Brexiters will also likely try and scrutinize the deal as well as possible already during the holidays and might produce noisy statements along the way.

Given the limited nature of any deal, the potential for a phase-in period remains equally limited. In reality, a phasing-out period would be required, maintaining some of the current benefits of EU membership until, for instance, customs capabilities have been ramped up at UK ports. But this remains difficult to envisage under EU law, and the related obligations in terms of rule-taking and money would further complicate the politics around such a deal in the UK. The risk of lorry queues will therefore likely persist well into next year, even if there is a deal now. The even bigger question of the future regulatory regime will keep both sides busy for years to come in any case.

More by Carsten Nickel