Brexit fatigue has become a real issue for many analysts and policy makers over the past three and a half years. The UK had been unable to plot a way out of the European Union, and it took no less than three Prime Ministers to determine how its exit would proceed. That is no longer an issue – as of the 31st January 2020, the UK has formally left the European Union, whilst it remains part of its regulatory framework. That part too will come to an end on the 31st December of this year.
The big problem now is: what happens as of 2021? What will be the relationship between the EU & UK from an economic, trade, political and security perspective? As of right now, that is not entirely certain, and is the subject of a new round of negotiations which are due to commence shortly between the European Commission and London.
The United Kingdom has a tightrope to walk: it is seeking to have a close trading and economic relationship with the EU, whilst also differentiating itself sufficiently from a regulatory perspective to be seen as attractive to foreign investors. The problem is that if pursues what the EU deems to be “unfair competition”, the UK will not be permitted to access the EU 450 million people market without trade tariffs and product quotas.
On the other hand, the current US administration has made it clear that it is seeking a post-Brexit trade deal with the UK, but is unlikely to look kindly upon a trade deal which aligns the UK too close to the EU.
Both the UK & the EU have set out tough opening bargaining positions, which are likely to soften somewhat behind closed doors. However, this is not to say that the negotiations will not be acrimonious. The EU are going to press home their advantages, such as the size of their market and their vast experience in negotiating trade deals in recent years.
The UK will look to resist any European requests on areas of particular sensitivity, like their territorial fishing waters, even if their economic importance is minimal. The last thing Johnson wants is to lose any political capital gained by delivering Brexit by squandering it on the future partnership negotiations.
In the end, however, Johnson will have to find a balance between appeasing Brexiteers seeking a fully independent British trade policy, the pressures from domestic businesses looking to retain a close relationship with the European Union, and his own political career. It will not be easy.