Brexit - What Next?
21/10/2020On 19 October, in an address to the UK House of Commons, the Chancellor of the Duchy of Lancaster, Michael Gove, clarified that the conversation between the UK Prime Minister, Boris Johnson and the European Commission President, Ursula von der Leyen, on “intensifying the negotiations” did not change the status quo and that the UK remains without a trade deal with the EU. On 16 October, Johnson had said that “the Council refused to negotiate in good faith and that a Canada-style free trade deal appears to be ruled out”. He urged the UK to prepare for 1 January 2021 with trade agreements that resemble Australia (No Deal) and are based on global free trade assumptions.
After Johnson’s statement warning of walking away from a ‘bad deal’, the German Chancellor Angela Merkel said that “if we want an agreement, both parties should make a move towards each other”. In contrast, the French President, Emanuel Macron, refused to “intensify negotiations” and insisted that the UK agree to a trade-off.
Though the Brexit stalemate continues, on 20 October, the EU’s chief Brexit negotiator, Michel Barnier, tweeted that the EU’s “door remains open” and he hoped to “make the most of the little time left”. On 21 October, in an address to the EU Parliament, Barnier said that a deal was possible if both, the UK and the EU “compromised”. As the deadline to finalise the free trade agreement is fast approaching, in case of a breakthrough, Barnier is expected to travel to London on 22 October to continue the negotiations.
Earlier this month, the European Commission notified the United Kingdom of its intent to launch legal proceedings in retaliation to the UK's continued implementation of the Internal Market Bill. The letter sent by the EU is the first stage of formal EU infringement proceedings. The Internal Market Bill sets out the UK Government’s post-Brexit plans for subsidy control and state aid.
On 15 June 2020, Johnson and von der Leyen agreed to rule out an extension to the transition period for the UK leaving the European Union (EU). The UK will be trading with the EU under new arrangements after 31 December 2020. Due to the real possibility that a UK-EU trade deal will not be reached before the 26 November 2020 deadline, the UK may be trading on World Trade Organization (WTO) terms next year. Though the decision to not extend the transition period beyond December 2020 provides businesses with some level of certainty, the ‘cliff-edge’ surrounding the future of trade between the UK and the EU coupled with the unrest caused by COVID-19 still looms large. In this document, we answer some of the most frequently asked Brexit-related questions.
This is a live document. It will be updated in accordance with the progress of UK-EU negotiations.
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