During a visit to the UK on Wednesday (January 8), new European Commission President Ursula Von der Leyen said that inking a trade deal between the UK and the European Union before 2020 ends — as Prime Minister Boris Johnson has pledged to do — was impossible.
She told an audience at the London School of Economics (LSE) that Johnson’s negotiation schedule was “tight” and that "you cannot expect to agree on every single aspect of our partnership" in the next 11 months. "We will have to prioritise," she said.
Her comments echoed the EU’s chief negotiator, Michel Barnier, who told MEPs last year that it was “unrealistic that a global negotiation can be done in 11 months, so we can’t do it all. We will do all we can to get what I call the ‘vital minimum,” he said.
What Barnier calls a “vital minimum” is what Johnson and other Brexiteers — opposed to an extension of the transition period between the EU and the UK — refer to a “bare bones Brexit”, an agreement on key issues that will form the basis of a future trading relationship.
Negotiations on that deal will begin once Johnson gets his Withdrawal Agreement Bill through the House of Commons this week - and the UK leaves the EU on January 31.
“I think the thought is to get a quick deal that could be supplemented in later rounds. A goods deal. No quotas. No tariffs,” said Nick Witney at the European Council on Foreign Relations.
Such a deal, Witney told Euronews, could “keep the vestiges of the British car industry going” and provide an export market for British meat. But a key stumbling block will be fishing in British waters by European nations, considered a red line by both sides.
Eight EU nations currently fish in EU waters, and stopping this access was a key rallying cry for the Leave campaign in 2016. But with the EU likely to take a hardline on access, Johnson will likely have to sacrifice Britain’s fishing industry if he wants a quick deal.
“Boris will have to back down. Sooner or later the UK fishing industry will be sold down the river,” explained Witney.
“It will look like a humiliation, [but] I wouldn’t rule out that Boris will be prepared to make that negotiation his card in getting a trade deal in 12 months.”
Another sticking point will be free movement: Brexiteers want to end it, but Von der Leyen said on Wednesday that “without free movement of people, you cannot have free movement of capital.”
Although the European Parliament has promised to vote on the Withdrawal Bill on 29 January — it was finally approved in the House of Commons on Thursday — approving the trade deal is far more complicated.
Even a bare-bones deal will need to be voted on by the European Parliament and then ratified by all 27 European member states, in some cases it will also need to be approved by regional parliaments. In 2016, a trade deal between the EU and Canada was blocked for several months due to opposition by the Belgian region of Wallonia.
“This would be the ultimate stymie,” said Caroline Turnbull-Hall, Director Corporate Affairs, Regulation and Legal Issues at PwC.
“We get the withdrawal agreement approved in the UK, [...] we get it approved in the EU, [...] but then we get to some sort of a future trade agreement and at that point, one member state says no they don’t like it. That could scupper the ultimate agreement,” she said.
If the bare bones deal cannot pass through the EU and its individual states before that date, Britain could leave the EU on a “no trade deal” Brexit, where the UK trades with Europe on World Trade Organisation (WTO) rules.
The alternative is that Johnson bites the bullet and asks for an extension to the transition period beyond the end of 2020, a deadline that was originally imposed when the UK was due to leave the EU in March 2019, giving almost two years to agree on a deal rather than 11 months.
If he chooses to do so, he will need to request that extension before June 2020.
“But at the moment I think it is absolutely impossible to tell,” said Turnbull-Hall.
One thing is for sure, and that is that Johnson and the Brexiteers believe that the only way to reach a deal with the EU is to have a firm deadline, with the view in Downing Street being that the way to get a deal with Brussels is at the last minute, says Witney.
Johnson will also be counting on significant pressure on European leaders from European industry, which does not want to see a "no-trade deal Brexit" any more than the bulk of British industry does.