The risk of double crisis

Monday, 2020-05-18 17:37:49
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The British Union Jack and European flags fly in front city hall, in Sangatte, France, March 13, 2019. (Photo: Reuters)
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NDO – The European Union (EU) and the UK have just concluded a new round of post- Brexit trade deal talks. However, the negotiation process took place at a very slow pace, partly due to the impact of the COVID-19 pandemic and major disagreements between the two sides.

The UK and EU entered the third round of trade talks last week with little hope of a breakthrough deal. Accordingly, the new round of negotiations began with online negotiations between the EU Head of the Task Force with the UK M. Barnier and his British counterpart D. Frost, followed by online talks involving the participation of hundreds of UK and EU officials.

The thorny issues that the two sides have to overcome in the current trade negotiations are regarding fisheries and the notion of a “level playing field” which allows fair and open competition.

However, like the previous two rounds of negotiations, this negotiation is still “at a standstill”. Both the UK and the EU have expressed their disappointment at this. The UK chief negotiator said there was little progress towards agreement on the most significant outstanding issues.

Meanwhile, the EU’s chief negotiator said that apart from some modest opportunities, the new round of negotiations did not produce any real progress on thorny issues.

Analysts said that in order to achieve progress in trade negotiations, both the UK and the EU must make concessions. While the EU needs to compromise more, the British Government also needs to be more flexible in its direction.

The British government has so far rejected any possibility of extending the Brexit transition period at the end of the year, even when the EU requested it to ease the political heat of the issue in the UK.

Meanwhile, opposition parties have called on Prime Minister B. Johnson to extend the transition period until after December of this year. An EU diplomat added that both the UK and the EU have expressed dissatisfaction about the current negotiation results.

Meanwhile, the transition period is coming to an end and according to the EU, it is necessary to conclude negotiations in October to allow enough time for the European Parliament and the 27 member states of the “big European family” to proceed with a new deal. However, the British Government has insisted that it will not concede to the EU's requirements in the negotiations.

In addition to disagreements between the UK and the EU, the COVID-2019 pandemic is also a "barrier" to the current post-Brexit negotiation process. Recent meetings have been delayed. In the recent round of negotiations, both UK and EU chief negotiators were “patients” who had just escaped the “death scythe” of the novel coronavirus.

If negotiations do not make progress this month or in June, both sides will almost certainly return to the negotiating table in the following months, but with a new set of incentives. Discussions under this scenario are likely to drag significantly and at that time, the negotiation process could be much more difficult.

At the present time, it can be seen that the risk of crisis due to post-Brexit negotiation failure is increasing. In the scenario of a no-deal Brexit, both the UK and EU will fall into a “double crisis” with their economy devastated both by the pandemic and a “hard Brexit”.

Accordingly, the UK may fall into a prolonged period of crisis and it would be very difficult for it to restore its economic growth.