In reality both sides could come up with a way to prevent another cliff edge at the end of next yearby Dominic Walsh / December 2, 2019 / Leave a comment
It has been widely observed that the new Brexit deal agreed by Boris Johnson leaves open the possibility of a form of no deal at the end of the transition. I have explained elsewhere how this differs to the version of no deal we are familiar with. While the ratification of the Withdrawal Agreement means it would be less disruptive overall, the consequences for UK-EU trade would be essentially the same—albeit with more time to prepare.
The problem arises because the transition is due to end in December 2020. The Withdrawal Agreement contains an option for the UK and EU to agree, by July, to extend the transition once for up to two years. But it is difficult to see a Conservative majority government opting for this. The party’s own manifesto commits to not doing so, and the conditions of an extension—particularly additional financial contributions—would be unpalatable. It seems likely that a Conservative majority government would go straight through the July deadline, making the new version of no deal the legal default in December 2020.
Some experts are growing increasingly alarmed about this possibility. In practice, however, there may be creative ways around the problem. It might be possible for the UK and EU to “fudge” the December deadline and buy more time—if it is needed. So how might that work?
There are broadly three things the UK and EU need to do in the next phase of negotiations: agree a trade deal, ratify and then implement it. The options available to the UK and EU in late 2020 will depend on which of these tasks is outstanding. A scenario where a deal is agreed but not ratified or implemented will be easier to address than one where a deal has not been agreed at all.
On ratification, a UK-EU trade deal is likely to require approval by all 27 national parliaments—and in some cases, regional parliaments too. This, unsurprisingly, takes time. However, trade deals can be applied “provisionally” before ratification is complete.
Provisional application has limits. Only those parts of the deal which come under “EU competence” could be provisionally applied, and this would not cover many aspects of services trade which remain the competence of member states. Further, agreement and preparation for provisional application is…