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Deal in danger: On post-Brexit U.K.-EU trade deal

  • 08 September, 2020

  • 5 Min Read

Deal in danger: On post-Brexit U.K.-EU trade deal

Context:

  • The U.K.’s hardening stance in the post-Brexit U.K.-EU trade deal negotiations.
  • The chief negotiator from the U.K. had recently stated that the U.K. would not yield on its demands despite the lack of progress in the negotiations and it would be fine even with a no-deal Brexit.
  • The British Prime Minister has set an October 15 deadline for reaching a post-Brexit U.K.-EU trade deal indicative of its hardened position in the negotiations.

Issues:

1. Northern Ireland issue:

  • The Brexit agreement seeking to avoid a hard border between Northern Ireland, which is part of the U.K., and the Irish Republic, an EU member had the Northern Ireland protocol which expected Northern Ireland to follow some EU rules while trading with the neighbouring Irish Republic.
  • The hard Brexiteers have been critical of the Northern Ireland clause, claiming that it endangers U.K.’s sovereignty and are planning a domestic legislation titled ‘the Internal Market and Finances Bill’, empowering the U.K. to follow new U.K. laws rather than those agreed to in the Brexit agreement.
  • Northern Ireland leaders have criticized the proposal for a domestic legislation.
  • They fear that such a move would necessitate physical checking of trade items between the two Irelands.
  • They also fear that it would lead to heightened tensions and threaten the Good Friday Agreement that brought peace to the region.
  • The Good Friday Agreement or Belfast Agreement is a pair of agreements signed in 1998 that ended the political conflict in Northern Ireland. Northern Ireland’s present devolved system of government is based on this agreement.

2. Other issues:

  • There is a lack of consensus on issues such as workers’ rights, environmental regulations, state aid to businesses and the fishing rights issue as well.
  • While the EU wants the U.K. to adopt rules that are close to its own to ensure a level playing field in the inter-European trade, the British government is reluctant to accept E.U. rules and has been arguing that the whole point of Brexit was to break free from common rules under the EU.
  • A no-deal Brexit would have substantial costs involved for the U.K. as well as the EU.
  • It will inflict severe economic costs on the U.K., at a time when the economy is in dire straits due to COVID-19. It would hinder the movement of goods and services between the E.U. and the U.K. and this would have a direct impact on the employment opportunities.
  • It would also have undesirable political consequences as it risks disrupting the hard-won peace in the island of Ireland.

Way forward:

  • The U.K. needs to respect the withdrawal agreement and be flexible in the talks as well as on deadlines.
  • Both sides should focus on reaching a consensus on trade and other future relations.

 

Source: TH

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