UK faces trade deal headache
HAMMERING out a trade deal between the European Union and post-Brexit Britain will be a one-of-a-kind negotiation, a battle between intimate allies unprecedented in modern history, officials and analysts say.
Recent EU free trade agreements, including ones with Canada and South Korea have taken at least five years to achieve, with negotiators bogged down in both tiny details and major headaches.
Efforts to reach a trade deal with the US have taken even longer and now stalled – but insiders say Brexit could top the lot when it comes to difficulty.
Lurking over the trade talks is the prospect of no deal, known as “hard Brexit”, a legal void that most observers believe could have grave consequences for Britain, but also the EU.
An EU-Britain deal would be the “biggest free trade deal ever struck . . . that goes far deeper than what happens for EUCanada or EU-Korea”, Ivan Rogers, who stepped down as Britain’s ambassador to the EU in January, told British MPs last month. British Prime Minister Theresa May launched the twoyear Brexit process on Wednesday, with the EU insisting that issues like Britain’s exit bill and the fate of EU citizens in Britain must be settled first.
But once those issues are settled, Britain and the EU will seek to sketch out a new future in the form of a far-reaching trade deal to cover all the issues currently covered by the single market.
Many in the EU have warned that it will be impossible to reach a deal before Britain leaves the EU in 2019, meaning it will need a transitional period before any full agreement.
European Parliament Brexit negotiator, Guy Verhofstadt, recommended limiting any such transition to three years after Brexit.
But Rogers warned that London would stand far weaker on trade than the “world-class” and highly experienced EU, with the British government having had no negotiators since the 1970s when it joined the bloc. Some pro-Brexiters in Britain argue that an EU deal make light of the challenges.
Indeed, Britain is currently an integral member of the EU’s single market, the most comprehensive international trade agreement there is. Why should hammering out a trade accord be difficult when your starting point is convergence? To some degree this was true, analysts said. “The previous experience of trade negotiations like doesn’t actually matter,” said Hosuk Lee-Makiyama, director of the ECIPE think-tank, referring to talks with the United States and Canada.
“This divorce settlement is going to be built on the . . . status quo,” he said. — AFP