Brexit warning: UK desperately needs trade deal more than EU – ‘Impacts far more severe’

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Negotiations on the future relationship between the UK and EU began in March after Prime Minister Boris Johnson delivered on his general election manifesto promise to “get Brexit done” on January 31. David Frost took a negotiating army to Brussels to begin talks with a team led by EU counterpart Michel Barnier, and there were smiles aplenty for the camera from the outset. But those smiles have soon been wiped off faces with the trade talks dominated by vicious blows between the two sides over their negotiating stances and demands for certain elements in any post-Brexit agreement.

Key areas such as the level playing field, state aid, tax and access to the single market all still remain unresolved – with no solution in sight.

Mr Johnson is insisting a trade deal must be signed with the EU before the end of the transition period on December 31, but has infuriated Brussels infuriated by refusing requests to extend this deadline.

Trade talks could reach a critical point on Monday when the next round of virtual negotiations begin, with Mr Frost continuing to warn the EU needs to dramatically change its stance in negotiations and relent on a number of areas if further progress is to be made.

On Wednesday, Mr Barnier sent a letter to UK opposition party leaders and said Brussels was open to the idea of extending the transition period by up to two years.

But this move was immediately slapped down by both Mr Johnson and Mr Frost, who are sticking by their determination to have a trade deal signed with the EU before the end of this year.

Despite Britain appearing to be in control of negotiations and making demands of the EU, political experts have warned that it is in fact Brussels who hold the upper hand in current trade talks.

Professor Alex de Ruyter, Director of the Centre for Brexit Studies at Birmingham City University, explained to “The EU holds all the advantage in the post-Brexit trade talks.

“As the UK conducts about half of its trade with the EU, whilst the EU in total only exports about 10 percent of its products to the UK, which will be heavily concentrated in certain sectors like automotive and fall more on countries like Germany.

“So whilst both sides would take a hit from ‘No Deal’, the effects would be far more severe for the UK.

When asked if the UK should extend the transition period beyond December 31, 2020, Professor de Ruyter added: “Yes, for all the reasons alluded to above. COVID-19 has sapped the ability of Government to devote time and resources to this.

“The prospect of a No Deal coming on top of the coronavirus disruption could tip many businesses over the edge and would devastate our manufacturing sector.”

Alistair Jones, Associate Professor in Politics and a University Teacher Fellow at De Montfort University, explained how Britain could find it difficult to operate in particular trade sectors if they are unable to strike an agreement with the EU.

He told this website: “The reality is that Britain probably needs the trade deal more.

“We import more than we export in our trade with the EU and much of what is imported, such as food and medicines, may be very difficult to source elsewhere.

“While the Germans are the largest individual trade partner (of the EU-27), they are pragmatic enough to try to find a common position.

“A lot of the smaller countries have negligible trade with the UK and are not going to invest time.”

Kostas Maronitis, Lecturer in Politics and International Relations at Leeds Trinity University, echoed Professor Jones’ comments, and said: “The EU has more of an advantage in these talks because it negotiates as a bloc of member states with more or less a clear understanding of economic and political objectives.

“Both sides are desperate for a comprehensive trade deal, but the prevailing idea in the UK that in the midst of a pandemic, nobody would notice just another wave of economic shocks and disruptions should be abandoned as soon as possible.

“The pandemic has exposed the UK’s dependence on migrant workers and on uninterrupted supply chains concerning food, medical and protective equipment.”

But Professor de Ruyter warned the EU will not change its negotiating stance in trade talks and is extremely unlikely to relent in the areas because of the risk the single market could “unravel” as a consequence.

He added: “The UK is a middle-sized economy with about 65 million people and the EU is a trade bloc with a population of about 450 million.

“If we look at the key areas of disagreement; fisheries and so-called “level playing field” provisions; on the former, fishing (whilst a totemic issue for the UK, despite its trivial economic contribution at about 0.01% of our GDP) is also equally totemic for EU countries with equally strong maritime traditions; the Netherlands, France, Spain, Denmark etc.

“Regarding the EU insisting on the UK abiding by level playing field provisions around, for example, labour laws, state aid and environmental standards, this is an existential issue for the EU.

“An ex-member state cannot be seen to extract favourable concessions on single market access, least other EU countries such as Poland and Hungary kick-off and start demanding similar treatment.

“At that point the whole single market really could unravel.”

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