Being just days away from the deadline for the Brexit deal negotiations to end, set by the EU for mid-November, tensions amongst the stakeholders are rising. The Irish foreign minister warned that the deal needs to be struck within the next 7 days or “we have real problems”. At an online event, Simon Coveney raised his concerns saying “it is quite possible that this could fall apart and we don’t get a deal.”
Similar concerns came from a senior EU diplomat, who told The Guardian “If there isn’t good news by then, then you really have to say that time is up – it just isn’t possible” when referring to the summit happening next Thursday, where the 27 heads of state initially agreed to meet and discuss the Covid-19 pandemic, yet now have also added Brexit to the agenda.
What’s the obstacle?
What’s still stopping the talks from reaching the finish line is the disagreements the UK and the EU have over the British fisheries and the demands the EU made to ensure the so-called dynamic alignment amongst environmental, labour and social standards. The EU wants the UK companies to operate under the same standardised rules if a free-trade agreement is to be signed. At the moment the UK is not ready to meet this demand and still believes the EU needs to show more willingness to compromise on some of their asks.
MEPs asked for these stumbling blocks to be overcome so that a trade and security agreement is presented to them by next Monday, giving them enough time for the rectification process. Due to the delays, it is now believed that a special sitting of the European Parliament might be scheduled for as late as the 28th December.
Major disruptions in the import/export industry
While the talks are dangerously approaching the deadline, businesses in industries directly affected by the results of the negotiations are predicting major disruptions. In Northern Ireland, two food manufacturers and major international distributors forecast supply shortages as the implementation of the Northern Ireland Protocol is still uncertain. Food producers lack clarity on whether products moved from Britain to Northern Ireland will be subject to tariffs and quotas and what the rules will be on labelling and customs procedures. Having experienced havoc trying to manage the supplies during the panic-buying period among the Irish citizens back in March, when the global pandemic hit the islands, the Head of Government and Policy at Associated British Foods, Ian Mace, believes it will be tricky to deliver some of the fresh produce to suppliers in Ireland on time.
Even with a deal, the EU-UK trade relationship will not be a smooth ride
Experts believe that even if a deal between the UK and the EU is going to be reached before the end of the transition period, the relationship between the two parties, post-Brexit will not be an easy one. What is suspected is that Britain will capitalise on the extended freedom and choose to move forward in a way that creates further divergence from the EU rules, prompting Brussels to react and punish London for doing so.
According to Ivan Rogers, former UK ambassador to the EU, the UK “will think very little indeed about the European reactions to these things until they’re hit in the face with the European reaction to these things”. Rogers believes the EU may well take the same approach.
If the UK and the EU choose to engage in a turbulent relationship, UK businesses may be negatively affected by further uncertainty and chaos caused by unsettling moves in London that will stir up, just as chaotic reactions in Brussels.
With just over a month to go, is your business ready to enter the post-Brexit future? Get in touch with us to chat about how we can support you!