Brexit: U.K.-EU Trade Talks Resume Ahead Of June Summit


The EU and the U.K. are resuming Brexit talks ahead of the June 1 summit. In order to extend past the December 31 deadline, both the EU and U.K. need to decide whether the deadline should be negotiated. After a talk in April, an EU negotiator said progress had been disappointing, while the U.K. said limited progress had been made. If a decision to make an extension is not made by June 30, the U.K. will either have to have a trade deal finalized by November 26 or they will revert to a ‘No Deal Brexit’. A ‘No Deal Brexit’ means there will be no transitional period after the U.K. leaves, and EU laws would stop applying to the U.K. immediately. The U.K. government is persisting for a deal agreement by December, and says an extension would “simply prolong disruption for businesses.” 

Liberal Democrats and the Scottish National Party are calling for an extension beyond December 2020, however, Prime Minister Boris Johnson has said the U.K. will not agree to an extension: “There is no need for a free-trade agreement to involve accepting EU rules on competition, subsidies, social protection, the environment or anything similar.” Currently, the U.K. is in a transitional period where they are still a part of the EU’s single market and custom union, but they are not a political member of the EU institution. 

There were two models originally presented to the U.K. for a post-Brexit trading relationship with the EU: The Canada Plan or the Norway Plan. The Canada model is a standard free trade agreement. This means imported goods are not taxed, some limits are put in place on imports, and services, like banking, could be restricted. Canada does not contribute to the EU budget and therefore there is no principle of free movement – Canadians are not free to live or work in the EU. The Norway model would allow the U.K. to keep their full access to the single market – which means reduced barriers while trading with the EU. However, the U.K. would have restrictions on changing rules that affect them. This model would be the least economically harmful. However, the U.K. rejected both these plans. 

The idea of free trade does not equate to seamless trading; free trade still requires rules for safety and product regulations. With all countries in the area following the EU set of rules, there is only one way to do things. The EU also guarantees free movement of services, capital, and people, while a free trade agreement does not cover these things. However, Boris Johnson has stated some things the EU promises, like maternity rights, are better in the U.K. than the EU as a whole. Johnson also stated the U.K. spends less on state aid than France and Germany. If the U.K. government does allow for an extension, they could decide on a trade agreement that is unprecedented. 

Maria Kuiper