As we dip into the second week of December, with the Brexit-deal deadline looming, things are slowly picking up. A positive announcement has been made by the Irish foreign minister, yesterday, welcoming the EU-UK agreement on how to implement the Northern Ireland protocol after the UK announced it is to abandon some clauses in legislation that the government signed last year and one that would have had the UK breaking international law. Under this recent announcement, Northern Ireland is going to remain in the single market.
A “very tricky” situation
Many believe that having the EU and the UK reach an agreement regarding this matter helps to push things forward and increases the likelihood of the two parties striking a deal at the end of the month.
However, according to the prime minister himself, things are still “very tricky”. There is still no agreement on the fishing rights, business competition rules and guidelines on how the deal will be enforced. According to a UK government source, the talks between Barnier and Gove have had no real progress since last Friday and so they need to continue politically.
Boris Johnson and Ursula von der Leyen had a 40-minute conversation on the phone on Monday where they addressed all the aforementioned matters. Unfortunately, this too failed to move negotiations forward. It has now been confirmed that the UK leader and the head of the European Commission will meet in person today to continue these intensive discussions. Mr Johnson is to travel up to Brussels after the weekly Prime Minister’s Questions.
Both parties remain optimistic that a deal can be reached in time. The EU claims it is not preparing for a no-deal outcome. However, it has also suggested that if no agreement can be reached before the end of the year, they would be willing to carry on negotiating in January.
Businesses fearing the final outcome
If an agreement is not reached in time, both parties, the UK and all 27 EU member states will impose import charges on all goods from the new year.
Many businesses have complained about the little information they have received throughout the process. The head of Toyota’s European business has admitted that a no-deal exit will have a “very negative” impact on their UK production plants.
Johan van Zyl fears they would become uncompetitive due to increased costs caused by tariffs. “If 90% of what you produce in the UK is exported to the EU, and you’ve got to do it at a duty, then you’re not competitive. You will not be able to compete with plants in Europe. So it is a very difficult situation,” he said, adding “But let’s see what the outcome of the negotiations is, then we can really decide what we’re going to do.”
According to Toyota Europe’s boss, the company prepared as much as it possibly can with the information that they have, but not much else can be done until the outcome is clear. Just like Toyota, we have been helping our clients to prepare, too. If you’re ready to make the transition, to whatever the new year brings, smoother, with our assistance on all the regulations and customs clearance after Brexit , get in touch today!