Daily Management Review

Trade Talks Extended, But UK And EU Also Warn Of A Likely 'No-Deal Brexit'


Even after once again agreeing to extend trade talks beyond a self-imposed Sunday deadline., both the United Kingdom and the European Union warned that it was now likely that there will be a no-deal Brexit.
After the after Wednesday's meeting between European Commission President Ursula von der Leyen and the UK Prime Minister Boris Johnson, described as a "last-ditch effort," ended for an agreement, failed to end a deadlock, the two parties had initially seta  Sunday deadline for extended talks.
While no new deadline for talks were announced on Sunday, von der Leyen said it was "responsible" to go "the extra-mile" and added that she had "constructive and useful" phone conversation with Johnson.
While opining that the two sides remain "far apart on key issues", Johnson, speaking in London, warned that "the most likely thing now is we have to get ready for WTO terms, Australia terms."
There is no free trade agreement between Australia and the European Union, even though talks to strike such a trade deal are underway. Johnson has widely used the expression "Australia terms" and there is a certain degree of euphemism in his government about a no-deal Brexit.
That usage of the term can be misleading since a Mutual Recognition Agreement already exists between Australia and the EU. That agreement is one of the benefits that can be used by manufacturers to get the required regulatory approvals for marketing and selling their goods. But there is no such agreement like that between the UK and the EU.
The trade between the UK and the EU will be governed by the rules set out by the World Trade Organization in the eventuality of the UK crashing out of the EU within a trade deal. WYP regulations would result in new tariffs and other trade barriers, such as regulatory checks and paperwork.
While warning that a trade deal may not be a possibility within the January 1 deadline, the British prime minister has said that his government will continue to try to reach a trade deal with the EU.
"I do think there is a deal to be done but we remain far apart on key issues. And we have to take back control of our fisheries," Johnson said.
Efforts to strike a trade agreement before the end of the Brexit "transition period" at midnight on December 31 have been ongoing for months by the European Union and the UK. three "critical" sticking points to the achievement of a trade deal were highlighted by Johnson and von der Leyen in a joint statement earlier this week. These included fishing rights, the UK's ability to diverge on EU standards, and legal oversight of any deal.
Both the EU and the UK will suffer economically if they are unable to reach a trade deal even though the UK will be a much greater impact of such a no-deal Brexit because the EU is the largest trading partner of the UK by far. Business of UK will be cut off from Europe's 450 million consumers if the UK looses access to its single market while also imposing new regulations and red tape and new and additional tariffs.