This time last year we were awash with talk of a no-deal Brexit crash-out. Now that talk is back again – in different circumstances, but with more reality about it.
The UK left the EU politically on January 31. On December 31 an interim EU-UK trade standstill ends.
The hope was that by then a new EU-UK free trade deal would be done. But now, with 77 days to go, we are back on the brink.
EU leaders decided on Thursday that negotiations should continue. But they also “called on the UK to make the necessary moves to make an agreement possible”.
On Friday afternoon, UK PM Boris Johnson released a video message in which he accused the EU of not seriously engaging in negotiations over recent weeks. He urged UK citizens to prepare for a no-deal outcome on January 1, which he said they would manage successfully.
But Mr Johnson notably did not rule out continuing talks. At the same time, EU Commission President Ursula von der Leyen said trade talks would continue and chief negotiator Michel Barnier would be in London next week for ongoing negotiations.
Then a short time later, Mr Johnson’s official spokesman announced there was no point in their negotiator, David Frost, meeting Mr Barnier in London next week.
“The trade talks are over: the EU have effectively ended them by saying that they do not want to change their negotiating position,” Mr Johnson’s spokesman said.
So does that mean an abrupt end to Brexit talks? Maybe, and maybe not.
It looks like there may have to be “talks about talks”. We’re back on the brink. It was always going to come to this.
First it was Canada, now it’s Australia
Yes, you’re entitled to be befuddled when Brussels jargon goes global.
Boris Johnson has often spoken about a Canada-style deal with the EU after Brexit. But it’s not entirely accurate.
The EU-Canada deal, completed in 2017, gets rid of most, but not all, tariffs or taxes on goods traded between them. It also increases quotas, the amount of a product that can be exported without extra charges. But it does not get rid of these altogether.
It does little about trade in services and, in particular, almost nothing for the trade in financial services. These are very important for the UK economy.
In fact, the EU-UK post-Brexit trade deal, if it worked out, was set to be far more extensive than EU-Canada. We are talking about unfettered access to a market of 450 million EU citizens on the UK’s doorstep.
References to Australia are even more tiresome here. It means a no-deal set-up for trade like the EU currently has with Australia.
Australia mainly trades with the EU under World Trade Organisation rules. That means tariffs and quotas – big time – and very bad news for Irish exporters to the UK.
So that’s it – is the UK really crashing out?
Events of the last two days certainly increase that risk. But we are looking at the turning point in a serious poker game here.
Many Brussels diplomats believe a basic trade deal can still be done in the short time available. After the two-day leaders’ summit in Brussels, Taoiseach Micheál Martin said a no-deal was in nobody’s interest.
It is certainly not in Ireland’s interest, definitely not in the UK’s interest, and mostly not in the EU’s interest either.
But we’re back on the brink. So, watch this space.