Just as trade negotiations between the UK and the European Union appear to be collapsing, there is reason to suspect that things may not be as bleak as they appear.
On the surface, the politics of calculated risk is clear: On Tuesday, the European Union challenged Boris Johnson to walk away from the talks on the October 15 deadline he set if it considered a deal impossible.
Following weeks, both parties’ statements have barely gone beyond reiterating the need to keep trying to reach an agreement. On Wednesday, Charles Michel, President of the European Council, urged the United Kingdom to put its cards on the table.
However, in private, officials are more optimistic. While politics is inescapable seasoned negotiators know that sometimes the worst moments occur shortly before a deal is reached.
Johnson’s phone call with German Chancellor Angela Merkel in October 2019 led a UK Government cause to report that, due to his stubbornness, an agreement on the country’s withdrawal from the European Union was virtually impossible. And nine days later, there was an agreement.
Now, the parties are trying to reach an agreement not only on their future business relationship but also on various issues ranging from cooperation in law enforcement to transportation. If no deal is reached by the time the UK leaves the single market and the bloc’s customs union on December 31, companies will face tariffs, costs, and disruptions at the border.
Johnson has said that if he sees no signs of having an agreement by October 15, he will back off, so companies can prepare.
The European Union’s leaders will discuss Brexit at a summit on the same day. The EU does not recognize that deadline and plans to continue negotiating for as long as necessary.
Officials in Brussels suggest making arrangements. Although some differences persist, the parties find a way to continue discussions until the second half of October.
- Trading Instrument
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