Brexit: deal or no-deal

4 Sep 2018

 

Brexit has relentlessly been thrown into the limelight ever since the referendum result in June 2016, when the UK voted to leave the EU. Now, with the fast-approaching deadline of 29 March 2019, time is running out to strike up any deal with the EU - let alone a good one. It’s a matter of deal or no deal.

 

Over the past few months, it has become glaringly apparent that Prime Minister Theresa May and the rest of the Conservative Party have failed to concur on a plan. Subsequently, this has resulted in key figures resigning from their positions.

 

Boris Johnson flatly rejected Theresa May’s Chequers proposal in early July, claiming that the UK is ‘headed for the status of colony’. Similarly, former Brexit Secretary David Davis resigned from his position as he did not wholeheartedly believe in May’s plan of action, arguing the UK was surrendering too much too easily.

 

Stepping forward in their place were Jeremy Hunt and Domimic Raab, respectively – whose aim is to fundamentally achieve complete consensus on a Brexit deal.

 

Yet, fast forward to the end of August, and the situation seems to have exacerbated. Tensions between and within British political parties, and also between the EU and the UK, have arisen as the latter is preparing for the possibility of a no-deal – an unthinkable situation six months ago.

 

A no-deal, coupled with austerity and low wages, could be detrimental to the UK, and only adds insult to injury to those already suffering in the current economic climate.

 

Previously, many were strong adversaries of a ‘hard’ Brexit. However, the tables have now turned as a looming no-deal has woven worry into the minds of UK citizens. What would such outcome imply? Can the UK afford not to clinch a deal?

 

In the last few days, ministers are more ‘optimistic’ that a ‘strong’ Brexit deal can be drawn up by October 2018. This is following the recent productive negotiations between the new Brexit secretary and EU chief negotiator, Michel Barnier. Nevertheless, a no-deal still remains a possibility, more so than previously imagined.

 

At first glance, a no-deal is what the UK needs to avoid at all cost. A ‘no deal’ would bind the UK to the World Trade Organisation’s (WTO’s) rules, impose tariffs on any goods that cross the UK-EU border, make businesses lose their passporting rights, and it would result in the UK exiting the single market for goods and agriculture.

 

This would be a catastrophic end to two-and-a-half years of ‘negotiations’. Yet, Theresa May still claims that a no-deal Brexit is better than a ‘bad’ deal.

 

On the positive side, a no-deal would mean that the UK is no longer under any legal obligation to finance its £39 billion divorce bill. Britain would also have free reign over trade deals, yet any potential trade deal would take a prolonged period of time to negotiate, and is definitely no mean feat.

 

Can Theresa May act quickly and efficiently to ensure a deal is in place by next March? Since it is now a matter of urgency, she needs to garner support towards her Brexit proposal. The UK cannot afford to relinquish a deal with the EU.

 

Agreement on tariffs and quotas with all WTO members appears unlikely, yet Raab remains hopeful that a UK-EU deal can be achieved. On the EU side, Barnier has vowed to conjure up a deal for the UK that trumps any previous deal with a non-EU state.

 

In any case, it is safe to say that this Brexit episode will most likely take more twists and turns before March 2019. What was once deemed a simple ‘leave’ vote has escalated into disputes, resignations, and a potentially unfavourable deal for the UK. Unchartered territory has provoked an unchartered plan of action.

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