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Only a few issues remain to be resolved for Brexit agreement, but they are not easy

13:42 | 17.10.2018 | Analytic

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17 October 2018. PenzaNews. The United Kingdom and the European Union will be able to reach agreement on the terms of Britain's exit from the EU. This opinion was expressed by Britain’s Foreign Minister Jeremy Hunt at EU foreign ministers talks in Luxembourg on October 15.

Only a few issues remain to be resolved for Brexit agreement, but they are not easy

Photo: Consilium.europa.eu

“A huge amount of progress has been made. There are one or two very difficult outstanding issues, but I think we can get there. Whether we do this week or not, who knows?” he told reporters on arriving for the meeting.

Meanwhile, Spain’s Foreign Minister Josep Borrell doubted that the parties could reach an agreement before the end of the week.

“Three or four days ago, people believed that it was going to be possible – an agreement – this week. Now it seems that it will not be possible. But this week is not the end, we have half a month left. We will continue the negotiations. I find it hard to believe that we will not come to an agreement,” he said before meeting of the EU foreign ministers.

In turn the EU’s chief Brexit negotiator Michel Barnier said on the eve of the meeting that the most important issues, including the Irish border, remain unresolved.

“We met today [Brexit Secretary] Dominic Raab and UK negotiating team. Despite intense efforts, some key issues are still open,” he wrote on Twitter, October 14th.

Analyzing the difficult situation around the discussion of the UK exit terms, Peter Taylor-Gooby, Professor of Social Policy at the University of Kent, stressed that the process is progressing extremely slowly.

Preparations for Brexit are still at an early stage and major issues are unresolved, including border with Northern Ireland, freedom of movement and financial industry,” he told PenzaNews.

In his opinion, at the upcoming European Council summit, the parties will not be able to agree on a future model of cooperation in the field of economics and security.

“Immigration will be a big issue not resolved in the EU whatever happens about Brexit,” Peter Taylor-Gooby explained.

At the same time, the real deadline for reaching an agreement has not yet been determined, he said.

“Officially, it is the end of October, but it can be extended. Issues can be put off after Brexit through temporary deals,” the expert said and added that Brexit is a disaster for the UK.

Meanwhile, Georgina Wright, Researcher on the Europe Program at Chatham House, reminded that according to Michel Barnier, the EU and the UK were in an agreement over 80% of the terms of the UK’s exit.

“But there is still one big stumbling block: the Irish border. It is still very unclear how they will resolve their differences. An agreement before next week – when EU leaders meet – is unlikely,” the analyst said.

She also noted that discussions on the UK-EU’s future economic and security partnership have barely begun.

“The EU has been reluctant to discuss these until the terms of the UK’s exit have been resolved, mainly the Irish border, so-called UK divorce bill and rights of EU citizens residing in the UK and vice-versa,” she added.

“The UK will leave on 29 March 2019 – unless talks are extended. The hope is that talks about the terms of the UK’s exit can be wrapped up by December so that talks about the future – that is the security and economic partnership – can begin,” the expert added.

She also suggested that the main difficulties still lie ahead.

“If we think negotiations so far have been problematic, let’s wait until discussion about trade and security begin. A transition period of 20 months may not be long enough,” the analyst explained.

In turn, Iain Begg, Professorial Research Fellow at the European Institute, London School of Economics and Political Science, stressed that both sides have a clear understanding of what needs to be resolved to conclude a withdrawal deal.

“There is evidence of some new thinking on prolonging UK membership of the customs union until a full alternative can be established,” he said.

However, in his opinion, the parties can only make a non-binding political statement of aims on the future UK-EU relationship.

“Agreement is unlikely, but I would expect to see more positive messages than emerged from the Salzburg informal summit last month,” Iain Begg added.

Speaking about the most acceptable time frame for agreeing on all the points, the expert suggested that the parties still have a month and a half.

“Working backwards from 29 March 2019, time is needed for parliaments to ratify the withdrawal deal, so that December may be an effective deadline, unless – and it is opposed by the UK – there is some prolongation of the article 50 withdrawal process,” the expert said.

“Even if the UK government and the EU27 converge on a credible deal, it will still face the major challenge of being ratified by the UK parliament. If this is not achieved, it will become UK constitutional crisis,” Iain Begg explained.

In turn, Neil MacKinnon, Global Macro Strategist at VTB Capital, said that “Brexit is simple despite all the deliberate confusion over details.”

“What is Brexit? Brexit means that the UK is not subject to EU law and EU regulation, that the UK has control over its own borders, that the UK has the ability to strike its own trade deals and that the UK no longer pays net 10 billion pounds sterling to the EU,” the analyst explained.

“Theresa May’s ‘Chequers Plan’ does not meet Brexit as it keeps the UK subject to EU law and regulation, keeps the UK in the customs union so the UK is not able to make trade deals outside the EU, the UK continues to pay10 billion pounds sterling a year to the EU but without any say in future EU laws and regulation,” Neil MacKinnon added.

In his opinion, this is the “vassal state” scenario which Prime Minister simply has no support for.

“Any compromise or concession or extension of the ‘transition period’ makes it unlikely she will get support from her party and she will have great difficulty in getting it passed in parliament. The bottom line is that her plan will look like a messy and unacceptable compromise which is ‘Brexit In Name Only,’” Global Macro Strategist at VTB Capital said.

Meanwhile, Anthony Glees, Director, Centre for Security and Intelligence Studies (BUCSIS), the University of Buckingham, drew attention to the need to distinguish between two things: the Withdrawal Agreement and the Political Declaration on the future relationship between the UK and the EU27.

“I think a Withdrawal Agreement between the UK and EU27 is close, I am optimistic that common sense will prevail on this; the two sticking points seem to be the Irish border issue and whether the EU will allow the UK full access to the Single Market for Goods but not for Services. I would expect the EU to agree if the UK agrees to put the question of a border in Northern Ireland or in the Irish Sea on the backburner for the time being,” the expert said.

However, in his opinion, it does not follow that the Withdrawal Agreement will get through Parliament.

“That’s Mrs. May’s big problem. There is no majority in Parliament for a Hard Brexit or even a Canada free trade agreement. There is no majority in Parliament for a 'Norway' solution, which implies access to the Single Market but not in the Customs Union. There is no majority for staying in the EU. There is no majority, in short, for anything at the moment, […].So it’s possible that the Withdrawal Agreement might be put to a Second Referendum,” Anthony Glees explained.

“I think that if the EU27 are clever they will do a deal with the UK; they also need the UK’s security apparatus and I think they will agree on that,” he stressed.

From his point of view, the likelihood that the parties do not agree is extremely small.

“If there is no deal in November, the pound will collapse, and chaos will reign in the UK. I don’t believe anyone serious has the stomach for this. We have already had two years of chaos, the impact of Brexit has already been severe, the value of pound has slumped by 18%, investment into our industries has dropped by 50%, prices have gone up, from having the highest growth in the G7, the UK has the lowest growth, no growth at all in the summer. Every household is ca 1,000 pounds poorer since 2016. This is all because of Brexit. These things don’t go away,” Anthony Glees explained.

He also added that Brexit “has been a monumental mistake.”

“Brexiters have no clear plan of what they want to do. A hard Brexit will deindustrialise Britain, destroy its agrifood and fisheries, drive us into the hands of Trump's America. Yes, only 10% of our economy is industrial manufacture. But it feeds into 50% of what we export. We will be substantially poorer even with Mrs. May's deal. These are very tough times for the UK. But maybe our liberal political class will find its muscles again, just as we did in 1940,” the analyst concluded.

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