Is the game of cat and mouse between the UK and the EU going to result in No Deal?

With just over two months left until the Brexit deadline, Downing Street’s recent decision to not restart the Brexit deal negotiations after the EU seemingly agreed to government’s demands to intensify the talks to reach a deal between the two parties, causes further uncertainty amongst UK import and export businesses.

Is this cat and mouse game going to cause further annoyance amongst the EU leaders and leave the UK businesses at a disadvantage post-Brexit?

Is it all just political posturing?

On Friday the 16th of October, Boris Johnson claimed there was no point in continuing the Brexit deal negotiations unless the EU fundamentally changed its position. This announcement was made by Number Ten’s spokesman shortly after Michael Gove had initially welcomed the offers made by Michel Barnier, the EU chief negotiator. This U-turn in the government’s final response after Gove’s initial acknowledgement left some of the EU leaders puzzled. Some, including Germany’s chancellor, Angela Merkel and the French president, Emmanuel Macron, admitted they were ready to compromise on some of the most pressing issues that were being discussed in the recent weeks, such as domestic subsidy control and the EU access to the British fishing waters. 

The UK is fighting its corner to achieve the independence they want and no longer be tied to the ‘Brussel’s rules’. Agreeing to competition regulations with its trade partners is on the table, such as the state aid in its post-Brexit trade deal with Japan and the continuous discussions regarding future deals with the US.  

With the UK’s persistence, there is a chance of the EU budging further on some of its competition demands, given there will be a robust dispute mechanism in place, allowing each party to take swift legal action if they feel the other has broken their agreement. 

However, as the EU told the BBC, protecting the single market is more important to the EU than a trade deal with the UK. 

What could be seen as political posturing is the UK’s attempt to send a clear message to the EU that what the government wants is EU’s willingness to compromise, just as much as the UK is willing to compromise, in order to reach a mutually beneficial trade deal between the two parties.  

Are we wasting precious time?

We are nearing the deadline and any further delay in the continuation of the negotiations leaves less time to agree on a comprehensive deal that doesn’t jeopardise, or at least not as extensively, the economies of the parties involved. 

If no deal is agreed with the EU before the end of the year, the UK will leave the single market and will need to begin to trade on the World Trade Organisation’s (WTO) terms. 

In a situation described above, as a UK business, you would need to pay high tariffs on goods and keep to restrictive quotas. If no deal is agreed upon in time, this would be the default state of affairs and would not require an agreement of either side. It would mean a drastic change in your business’s operations and would likely result in a variety of formalities.

Deal or No Deal, we are ready  

Here at UKCS, we are staying up to date with all of the latest news relating to the Brexit deal negotiations and acting accordingly. Contingency planning during such uncertain times is difficult, yet not impossible. Our team has grown in numbers and our experts have taken further training to assist our current clients and future clients, whatever the outcome of the negotiations will be. 

If the cat and mouse game you’re observing among the political leaders is making you feel worried about the future of your business, be sure to download our Brexit Pack.