From the desk of Josh Hardie

This stage of Brexit may feel like déjà vu all over again. Deadlines slipping. Crunch talks continuing. So far, so familiar? Yet the situation facing companies is stark.

Businesses’ resilience has been stripped bare by coronavirus. Despite huge efforts, firms are telling me they’ve gone as far as they can to prepare. With just 45 days left, many business-critical issues remain unresolved.

Political and economic timetables cannot continue to compete, they must now converge. The priority must be agreeing a deal at the earliest opportunity, not reviewing options for the latest possible date. Assessing just a few of the outstanding issues highlights the reason for urgency.

As the National Audit Office recently said, “significant risk” remains in relation to the arrangements required to implement the Northern Ireland protocol. Last week’s warning from UK supermarkets must be noted. With just weeks left, they still don’t know whether they will be able to legally export meat, fish or dairy products into Northern Ireland.

Like businesses, the government is working flat out to resolve issues. But practical answers to implement the protocol are only likely once a UK-EU deal has been struck.

Without agreement, companies may hope for the best but must plan for the worst. That means planning for tariffs that come with no deal. But when setting prices for the coming year, do they absorb the increased costs and scale back vital investments? Or do they pass on costs to hard-pressed customers?

Businesses confront similar uncertainties when it comes to the detail of a deal. Rules of origin are key to our manufacturers. Companies know they need to undertake an exhaustive review of the origin of every product component. Yet clarity on whether these rules will work will not be clear until the text is signed. That means businesses making buying decisions today, without knowing whether they will face tariffs that will wipe out their profit margins.

Delays in the talks are also holding up a host of issues that can only be resolved once an FTA is agreed, including the rollover of third-party agreements. Take Turkey, a vital market in the supply chains for many UK companies. The UK government says it has a deal ready to go, but it is contingent on the successful conclusion to the talks. Such limbo means companies simply don’t know whether future orders of car parts, clothing or construction equipment will be liable to tariffs from January.

The challenge is no smaller for services. Data is the currency of the modern age, and data adequacy can only be agreed on the back of a deal. Without this, companies will not be able to hold data from Europe legally and will need to introduce new safeguards to keep data flowing. Smaller businesses have neither the time nor the resources to rewrite contracts. If no agreement is forthcoming, they face a data cliff edge.

Make no mistake, rolling deadlines are already costing companies, which have seen cash reserves disappear and stockpiles dwindle. An agreement is the best way to help European economies stricken by the pandemic.

There have been more than 50 months of fierce debate. Now there are fewer than 50 days to secure a deal. The united business message is clear: this costly uncertainty has lasted long enough. The political challenges of compromise are dwarfed by the economic shock of delay. Decisions that are hard today will be no easier to make tomorrow.