Brexit: A crucial month ahead

While news of Brexit has fallen from many front pages due to recent events, the clock is still ticking towards the December 31 deadline for a deal being reached between the UK and EU. With negotiation talks having slowed due to the coronavirus pandemic, Steve Schofield, BPMA Director and Chief Executive, explains why June could be a crucial month.

When the UK left the EU on January 31 and subsequently entered into a transition period, nobody knew what was around the corner. In March the UK went into lockdown caused by the Coronavirus pandemic. All face to face meetings with the EU were postponed, and for the first time in nearly two years Brexit news was off the TV and front page; replaced by COVID-19. Behind the scenes, discussions and video meetings continued all be it at a slower pace and with less UK and European civil servants working on Brexit.

From day one Prime Minister Boris Johnson has said he would not extend the negotiation period and if by the December 31 the UK had not agreed a deal then the UK would walk away without a deal. With the considerable disruption caused by COVID-19, the press and public thought that an extension to the negotiation period would be necessary, but the UK Government are still saying no.

In May the UK Government published their legal text for an agreement to show the UK public and other countries within Europe that the UK was prepared to compromise and that the stumbling factor was Michel Barnier, the EU chief negotiator.

The texts are available at bit.ly/3eLulwY

The text identifies that the UK is seeking a Free Trade Agreement (FTA) with Europe but not to be part of the Single Market or Customs union. It advises that the proposed UK FTA is very close to the those the EU has already agreed with Canada, Japan and Norway. The UK is accusing the EU of seeking additional unbalanced and unprecedented provisions

with a close economic partner. The UK also identifies that the EU is not willing to replicate provisions for mutual recognition of conformity assessment, something it has granted for Canada, Australia and New Zealand. The text also advises that the EU is requesting the UK to commit to unbalanced proposals which would bind the UK to EU laws and standards.

Overall, as I write, what the EU is offering does not constitute a fair free trade relationship between close economic partners.

By publishing the UK’s legal text and by sending a letter direct to Michel Barnier, it would suggest that the UK’s chief negotiator, David Frost, is identifying areas of concern that require resolution. Many civil servants in Westminster believe that June will be the crucial negotiation period and that if the UK does not feel any compromises are forthcoming from the EU in critical areas, then the UK will walk away from Europe on June 30 without a deal.

Economically to have the global disruption from the COVID-19 pandemic and then a no-deal scenario with the EU could affect the mechanical and electrical sector for many years to come. It is therefore hoped that negotiations with the EU will continue until a suitable agreement is made.