Businesses plead for post-Brexit deal as trade talks remain stuck; EU, UK warn citizens to brace for upheaval

A no-deal split would bring overnight tariffs and other barriers that would hurt both sides, although most economists think the smaller British economy would take a greater hit because the UK does almost half of its trade with the EU

The Associated Press December 11, 2020 23:28:45 IST
Businesses plead for post-Brexit deal as trade talks remain stuck; EU, UK warn citizens to brace for upheaval

Ahead of the year-end deadline there are already extra long tailbacks of trucks on both sides of the English Channel as UK companies try to lay in extra stock in case of disruption in January. AP

London: British businesses and some European Union leaders on Friday urged Prime Minister Boris Johnson to strike a last-minute trade deal with the EU, as the two sides told their citizens to brace for New Year upheaval in the UK-EU trading relationship.

Johnson said it was “very, very likely” that negotiations on a new economic relationship to take effect 1 January will fail to strike a deal.

Johnson and European Commission President Ursula von der Leyen have set a Sunday deadline to decide whether to keep talking or prepare all-out for a no-deal break.

Johnson said "there is a way to go - we’re hopeful that progress can be made" between the two negotiating teams in Brussels.

“But I’ve got to tell that from where I stand now, ... it is looking very, very likely" that the UK will end up trading with the bloc on World Trade Organization terms — with all the tariffs and barriers that would bring.

Britain left the EU on 31 January but has continued to follow the bloc’s rules during a transition period that lasts until the end of the year.

While both sides want a deal on the terms of a new relationship, they have fundamentally different views of what it entails. The EU fears Britain will slash social and environmental standards and pump state money into UK industries, becoming a low-regulation economic rival on the bloc’s doorstep, so is demanding strict “level playing field” guarantees in exchange for access to its markets.

The UK government claims the EU is trying to bind Britain to the bloc’s rules and regulations indefinitely, rather than treating it as an independent nation.

At the end of a two-day summit where she briefed the 27 EU leaders, von der Leyen said that the question of alignment with EU regulations need not be a deal-breaker, and that the bloc was not trying to undermine the UK's desire for sovereignty.

“They would remain free, sovereign, if you wish, to decide what they want to do," she said.

“We would simply adapt the conditions for access to our market.”

That would mean that if, in the future, the EU finds that UK rules are too lax compared to its own, it could still allow for trade, but with added tariffs or other measures.

“This has nothing to do with freedom of sovereignty. He is sovereign, he is free and we are all free," said Dutch Prime Minister Mark Rutte.

Talks remained stuck also on the issues of fishing rights and the legal oversight of any deal.

With Sunday's deadline looming, some EU nations warned their negotiators not to be too conciliatory towards London.

“There are questions of fundamental importance. They are not minimal," warned Italian prime minister Giuseppe Conte.

“We’re talking about allowing a state that is no longer part of the European Union to enjoy advantages to the (EU) common market."

“To enjoy these advantages, you have to subject yourself to the rules of the common market," he said.

German foreign minister Heiko Maas and Irish foreign minister Simon Coveney said at a press conference in Berlin that both still thought it was possible to make a deal that would be good for all sides.

Maas said the EU would negotiate “for as long as the window is open a crack".

“We want a solution, but only one that makes sense and is in the interests of the people of the European Union and also of Great Britain, and I also think that’s possible," he said.

Coveney urged politicians “to try and dial down the language in terms of the division and differences of views and focus on the detail".

A no-deal split would bring overnight tariffs and other barriers that would hurt both sides, although most economists think the smaller British economy would take a greater hit because the UK does almost half of its trade with the bloc.

Ahead of the year-end deadline there are already extra long tailbacks of trucks on both sides of the English Channel as UK companies try to lay in extra stock in case of disruption in January.

Britain’s Office for Budget Responsibility says a no-deal Brexit would slash 2 percent off UK gross domestic product in 2021, on top of the damage done by the coronavirus pandemic.

Supermarkets say food prices will rise, with 85 percent of foods imported from the EU expected to face tariffs of more than 5 percent, according to the British Retail Consortium.

To cushion some of the shock of a no-deal split, the EU has proposed contingency measures to make sure that air and road traffic can continue for six months after 1 January. It also proposes that fishermen should still have access to each other’s waters for up to a year.

The plans depend on the UK offering similar initiatives. The British government said it would “look closely” at the proposals.

Updated Date:

Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.

also read

Dummy's guide to how trade rules affects the access to COVID-19 vaccines
World

Dummy's guide to how trade rules affects the access to COVID-19 vaccines

There is an urgent need to clarify public interest and public health exceptions to TRIPS intellectual property rights.

Sensex jumps over 300 points to breach 50,000-mark for first time; NSE Nifty tops 14,700
Business

Sensex jumps over 300 points to breach 50,000-mark for first time; NSE Nifty tops 14,700

Bajaj Finserv was the top gainer in the Sensex pack, rising around 4 percent, followed by Bajaj Finance, Reliance Industries, IndusInd Bank and Axis Bank

No chief guest, no motorcycle stunts, smaller crowds: What to expect from Republic Day 2021
India

No chief guest, no motorcycle stunts, smaller crowds: What to expect from Republic Day 2021

In view of the COVID-19 pandemic, the celebrations will take place with many changes, including a shorter route for the parade and much less public participation in the event. The overall scale and size of the parade has also been restricted