Brexit in corona times
Just a couple of months ago, Brexit appeared to be the only certain dominant subject covering the headlines for 2020. In the meantime, the coronavirus pandemic has largely suppressed coverage of the Brexit negotiations that started in March.
The UK officially left the EU on the first of February 2020 and entered the so-called transition period. During this period the UK and the EU are required to negotiate the terms of their future relationship, which preferably will commence on the first of January 2021. However, there is an option to extend this period. Several obstacles could have a major impact on the timeline of the negotiations and the form of the future relationship. The corona pandemic could also prove to be a major factor during these negotiations.
The Brexit timeline
The first most important deadline will be on the first of July. This is the deadline for the British government and the European Commission to extend the transition period with a maximum of 24 months. This period is due to end on the 31st of December 2020. June will, therefore, be a crucial month in the negotiations. During the transition phase, the UK will remain part of the EU single market and customs union, but the UK will neither be represented in EU institutions nor have a voice in EU decision-making processes. Should the UK not seek an extension of the transition period before the first of July, the EU and the UK will start their new relationship as of 2021, with or without a deal.
A matter of principles
The Johnson government has consistently emphasized that it will not seek an extension of the transition period. Supported by a strong electoral mandate after the December elections and a large majority in the House of Commons, Boris Johnson seems more determined than his predecessor Theresa May to keep this promise. For Johnson, Brexit is more a matter of principle than it was for May. Whilst May mainly sought to limit the economic damage of Brexit to the British economy, Johnson focuses on the sovereignty and autonomy of the UK. Johnson has proven to be a pragmatic politician, but when it comes to autonomy, Johnson seems unwilling to compromise.
Two examples of controversial issues are fisheries and the role of the European Court of Justice. Control over the fishing quotas in the North Sea is an important issue for the UK. Fisheries are an insignificant sector for the British economy, contributing approximately 0.1% to the GDP. Still, it has always been a politically sensitive issue. A positive outcome for the UK on fisheries would mean a largely symbolic victory in regaining sovereignty back from the EU. The same goes for the role of the European Court of Justice. The EU wants the court to function as an independent arbiter in future disputes between the UK and the EU. The UK strongly opposes this because they argue that it would give the EU the final say.
A level playing field
The UK is in favour of a similar trade deal as the one between the EU and Canada. Most trade barriers would be lifted while the UK would regain autonomy over its policies. For the EU, this is not an acceptable position because they consider the cases of the UK and Canada to be completely different. Because Canada is located on the other side of the ocean, it isn’t a direct competitor to European markets, as is the UK. A deregulated market directly located next to the European internal market would cause unfair competition with the European markets. The keyword for the EU is, therefore ‘level playing field’, equal and fair competition between the UK and EU markets.
The upcoming negotiation rounds will have to cover many of these issues. Due to the outbreak of the coronavirus, the UK and the EU have decided to discuss these topics during four negotiation rounds. The first and second round took place in March and April, the third and fourth round will take place from 11-15 May and from 1-5 June through videoconferencing.
Approaching the deadline
After concluding the second round of negotiations in April, Michel Barnier, responsible for the negotiations on behalf of the EU, expressed disappointment with the progress. A breakthrough has to occur during the upcoming rounds for the deadline to be feasible. Of course, this is part of the political game to pressurize the British government, however, the call for an extension of the transition period is getting louder within the UK.
The call for an extension is getting louder
Reaching an agreement before the end of the year was a difficult task, to begin with, let alone under the current circumstances with the coronavirus. Brexit-critical newspapers such as The Guardian have, for example, published articles on why the UK must request an extension of the transition period. Negotiations about international trade deals are normally a process that takes years and is accompanied by delicate diplomatic negotiations and many face-to-face meetings. It is nearly impossible to mimic this process via Zoom, as much of the crucial aspects of negotiations cannot take place, as Denis MacShane, former UK Minister for Europe, argues. Brexiteers have been calling for an extension of the transition period as well. Nick de Bois, a former Tory MP and a prominent Brexiteer argued in the British newspaper The Times that Boris Johnson should seek an extension of the transition period due to the corona crisis. Of course, there are also still many that urge not to request an extension. But those in favour of an extension are growing in numbers since the outbreak of the coronavirus.
A growing threat of a no-Brexit deal
Another feared scenario is that Boris Johnson will use the opportunity of the corona crisis to ‘smuggle’ a badly negotiated, or even a no-deal Brexit through. The Bank of England recently forecasted that the UK economy is heading for its worst crash in more than 300 years. The British economy could contract by 14% by the end of 2020 due to the coronavirus, while the European Commission expects the economy of the EU to shrink by 7.5%. Under this severe economic fallout, it will be difficult to determine to which degree Brexit contributed to the contraction. The Irish European Commissioner for Trade, Phil Hogan, also recently warned of this scenario. According to Hogan ‘’there is no real sign that our British friends are approaching the negotiations with a plan to succeed.’’ He furthermore added that he thinks that the UK government will blame the fallout from Brexit on COVID and that the British government will not request an extension of the transition period because they have COVID to blame for everything.
The upcoming two negotiation rounds will prove to be crucial for the future development of the negotiations between the EU and the UK. After the previous two rounds, little progress has been made and a perspective on a possible trade agreement still seems far away. The Johnson government seems determined to deliver Brexit in 2020 at (almost) all costs. After all the broken deadlines during the earlier process, Johnson wants to deliver to the British people what he promised, besides also being an ardent advocate of British autonomy himself. The entrance of the coronavirus into the negotiation process has already had a direct effect on the key negotiators. The question of whether corona will also influence future negotiations is difficult to answer but it will definitely be a factor to take into consideration. One thing is for sure: in the coming month, we can definitely expect Brexit to make a comeback into the daily headlines.