EU Reportedly Warns UK of Major Trade Disruption From 1 January If No Deal Arrives in Next Few Days

The European Union has made it clear to Britain that unless there is a breakthrough in talks by Friday it may become impossible to avoid massive trade disruptions on 1 January, The Irish Times reported citing a source close to the ongoing talks in London.

“Even if we get a deal in 10 days time, if we run down the clock too much, there is a very real risk that the deal can’t be ratified in time. We need to put an end to this somehow”, the source noted, adding the disruption is more than probable in the event of a failure to allow enough time for the deal to be duly ratified by the European Parliament.

The source noted it would last for as long as the negotiations continued.

The position echoes a statement made the other day by British Foreign Secretary Dominic Raab, who stressed that the extent of the disruption under a no-deal scenario would depend on how the Europeans move forward.

The comments came as frictions spiked between member states and the EU negotiating team, with a group of bloc countries led by France warning that they would prefer a no-deal option over an accord that would prioritise Britain’s interests over theirs.

France and the Netherlands are deeply concerned chief EU negotiator Barnier could well go beyond what they can accept in a bid to reach a deal, while the negotiator has suggested he needs more flexibility to win Britain over, according to diplomatic and official sources.

Not at Any Cost

“Obviously an agreement would be good to have but not at any price”, an EU diplomat said, as cited by The Irish Times.

Bernd Lange, a German MEP in charge of the European Parliament’s trade committee was briefed by Barnier on Wednesday as a member of its UK task group. Lange said that he was less optimistic a deal could be reached now than previously, arguing that given the facts he had at hand no deal appeared at first glance to be the better option.

“To be open and frank, I’m really upset about the procedure. There is no possibility for the European Parliament, member states as well, to have a proper scrutiny of the agreement. This is really, really going from tragedy to farce and this is really quite unique in the history of trade agreements in the European Union”, Mr Lange said. 

“This is really the end game, and that’s also clear for the British side”, he stressed.

Likewise, Chancellor of the Exchequer Rishi Sunak, asserted last week that London would by no means sacrifice its interests merely for the sake of a deal becoming a reality.

No Deal ‘Won’t Lower Political Temperature’

Yet, according to Julian King, the UK’s last European commissioner and a former ambassador to Ireland, a no-deal option is the least favourable one for all the parties involved.

“For my former colleagues in the commission and across the EU, it’s time they also faced up to some of the realities of the fallout from a no-deal. Extra barriers to trade would cut in both directions. No deal on fishing rights won’t help the fishermen in Ireland, Belgium, or northern France, and it won’t lower the political temperature around the issue”, he wrote in an op-ed for The Irish Times.

He went on to point out that a no-deal outcome would bring with it major disruptions, “internally and internationally”, as it will lead to “the inevitable imposition” of tariffs and quotas on trade between Britain and the EU, as well as between Britain and Northern Ireland, which would come on top of all the rest of the restrictions to trade like customs and sanitary checks.

Stalemate in Talks on Post-Brexit Ties: Sticking Points

Talks between the United Kingdom and the European Union have intensified over recent weeks as the end of the Brexit transition period – 31 December – draws closer. Speaking on Monday, European Commission spokesman Daniel Ferrie said that there is “no possibility” of extending the transition period beyond the current deadline.

The negotiations remain stuck on fisheries, with each side only ready to cede a maximum of 20 percent of current stocks to the other, according to a source briefed on the matter. Britain insists access should be decided on individually, on a regular – annual – basis.

The country, which formally exited the European bloc on 31 January 2020, has reportedly tabled a proposal to review the original withdrawal agreement, including fish quotas, in five or 10 years, in a last-ditch effort to talk the EU into reaching a compromise on the matter.

Separately, there has been an impasse between Brussels and London for months over other divergences, namely, level-playing field conditions — the set of common rules and standards designed to prevent businesses in one country from undercutting their rivals in other countries, as well as governance.

If no trade deal is agreed upon, EU-UK economic ties will fall under World Trade Organisation rules starting in 2021, with the latter including conventional customs tariffs and full border checks for goods travelling across the English Channel.