Trade Deal Between the UK and the EU: A Feasible Path Forward

With the looming end of the transition period, the question of whether the UK and the EU will reach a trade deal has become increasingly relevant. In this article, we explore the prospects of a potential trade deal and the factors that influence its feasibility.

The Current State of Negotiations

As stated by Ursula von der Leyen, President of the European Commission, in December 2020, there is a path to an agreement, albeit a narrow one. This suggests that while the negotiations are complex and challenging, a deal is still within the realm of possibility.

The UK government and the EU's European Commission are in the process of negotiating a Partnership Agreement. This agreement covers trade services and security co-operation. Unlike a full trade deal, it can be provisionally applied from January 1, 2021, even if the legal processes continue beyond that date.

EU's Ratification Process

Given the complexity of EU processes, the ratification of the Partnership Agreement is crucial. The European Commission has emphasized the importance of finalizing this agreement. Ursula von der Leyen’s comments during a direct address to the European Parliament highlight the growing political will to reach a deal.

For the UK-EU Agreement to come into legal force, it must be ratified by the European Parliament. In the meantime, provisional arrangements can be implemented. This process is seen in the case of the Canada-EU CETA trade deal, which was provisionally applied in September 2017 and is still awaiting final ratification.

Key Factors Influencing the Feasibility of a Deal

One of the key factors in the negotiations is the principle of the level playing field. According to recent reports, Boris Johnson has accepted this principle. This development has significantly improved the chances of a deal from "not a chance" to "fifty-fifty." The acceptance of the level playing field principle means that the UK is willing to ensure fair competition, which is a crucial aspect of any trade agreement.

However, even if a deal is agreed upon, there will still be challenges. A temporary no-deal Brexit will be necessary due to the impending time limitations for ratification. The lack of time to finalize the deal could result in a temporary no-deal scenario, necessitating the UK to revert to World Trade Organization (WTO) rules.

Conclusion

The path to a trade deal between the UK and the EU is still uncertain, but the current political will and the acceptance of the level playing field principle offer promising prospects. The ratification process remains the critical hurdle, but with continued negotiations and cooperation, a deal can be achieved.

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