Brexit negotiations: a timeline
Where are we and what does it mean for business?
With slow progress over the summer, and less than 100 days to go until the end of the transition period on 31 December, it was always likely that the negotiations would hit a crunch point in Autumn. The publication of the UK Internal Market Bill (IMB) in September heightened tensions between the two sides as they head into the final month of negotiations.
A non-negotiated outcome later this year remains a real possibility. But despite the fire and fury of the past few weeks, both sides remain committed to negotiating a deal. While the publication of the internal markets bill was met with dismay in Europe, behind the scenes the mood is more measured. While in London the Prime Minister and members of his Cabinet have stood at the dispatch box and insisted a deal remains their priority.
However, the timelines remain extremely tight with little room for error on either side to avoid a no deal outcome.
What are the key negotiating deadlines?
28 October: ninth round of negotiations
All eyes will be on the negotiations this week to see if progress can be made in a number of key areas where disagreements remain, including fisheries, transport, energy, and the level playing field.
But the biggest hurdle to secure an agreement remains State Aid. Despite the UK spending only 0.38% of its GDP on state aid in 2018 – compared to 0.79 in France and 1.45 in Germany – autonomy over state aid remains at an impasse. Brussels has asked for the UK to remain in lockstep with the EU on state aid. For the UK, the issue is one of sovereignty, with the government saying it cannot accept state-aid provisions stricter than those in the EU’s trade agreement with Canada.
On 9 September, the UK threw the EU a bone on its plans, announcing it would follow WTO rules for subsidies on goods, adhere to state aid rules in free-trade deals and provide more details later. And although this was originally rejected by the EU, a compromise is possible, with the EU suggesting that a robust but distinct British regime, coupled with a way of fixing disputes, could suffice.
So a solution and a way through to a deal is possible, but significant progress will be needed over the coming weeks if a non-negotiated exit is to be avoided at this stage in the talks.
15-16 October: European Council
The October European Council has been earmarked as the final opportunity for the leaders of the EU27 to sign off on a Brexit deal. Boris Johnson has said that there needs to be progress in negotiations ahead of the European Council meeting if a deal is to be agreed by the 30 October deadline.
30 October: final negotiation deadline
The EU has stated that a deal needs to have been agreed by 30 October in order to give the two months needed for ratification and implementation ahead of the end of transition on 31 December. However, some flexibility in this could be found if a deal is close to being reached by this date and able to be promptly signed off by the EU27.
31 December: end of transition period
As of 31 January 2020, the UK moved into a status quo transition period until 31 December 2020. The current rules on trade, travel and business for the UK and the EU continued to apply during the transition period. As of 1 January 2021, new rules will start to take effect according to our new trading relationship with the EU.
What does this mean for business?
Deal or no deal, status quo ends 31 December bringing with it increased costs and barriers to trade. But the political timetable remains out of kilter with that of businesses on both sides who need to be given enough notice and the necessary tools to prepare for our new trading relationship.
And we know the coronavirus pandemic has consumed business’ attention over the past few months. Business preparations have not only stalled, they’ve gone backwards. In the CBI’s latest survey, 21% of firms told us their level of preparedness has declined, while 58% have been unable to progress their plans. This has left them with very little capacity to prepare for a chaotic exit from the EU amidst the pandemic, with firms having used up their stockpiles and reserves to survive the pandemic. And while the UK government has provided some guidance on crucial issues, businesses are still struggling to make the necessary preparations with the time they have.
What are the CBI’s priorities?
As we head into this critical period, the CBI has two main priorities:
- Continuing to make the business case for securing a deal
Our message is the same in public as in private - a deal is the absolute priority for business. And we have been in constant communication with political stakeholders on both sides urging them to renew efforts to get a deal that is absolutely essential to protect people’s jobs and living standards amidst one of the worst recessions in living memory.
- Helping business to prepare for the end of the year
To support firms across the UK prepare for the end of the transition period - deal or no deal - the CBI launched its UK transition hub in August. The hub contains useful guidance on a range of issues, bringing together the CBI’s own advice alongside sectoral trade associations and the Government’s own guidance.
The CBI will remain vocal on these issues ahead of October. And we will continue to push the message that firms will find it extremely difficult to prepare for a cliff-edge exit during the COVID-19 recovery.
As always, member insight will drive our messaging. Your anecdotes get fed straight into government, so please get in touch with us at [email protected] to share your experience in the lead up to the end of the transition period – what are the biggest challenges you’re facing and what can the government do to solve them?
Prepare your business for the UK’s post-Brexit trading relationship with the EU.