Westminster has already started the Christmas vacations. The ladies went home on Thursday night and, according to the official calendar, they will not return until January 5th. But none of them have any special plans. And no longer just because of the pandemic. At any moment, they could be called again in an extraordinary session to ratify the expected economic agreement between London and Brussels.
Without a pact, relations between the two sides will be governed solely by the guidelines of the World Trade Organization (WTO), which means quotas and tariffs. A hard economic Brexit would be catastrophic for a country that is already in recession and this year is on its way to accumulate the historic deficit of 19% of the Gross Domestic Product (GDP), the highest debt in times of peace.
The breakdown of negotiations without a trade pact could lead to an immediate collapse of the pound, even before December 31, when the transition period ends. Some experts estimate that the British currency may lose up to a fifth of its value against the euro and the US dollar.
Of course, the Brexit was always a purely political issue. And although it may be hard to believe that Downing Street can slam the door on a single market to which it destines 47% of its exports, the truth is that today, the ghost of a non-trade agreement is a possibility that is on the table.
In recent days, the messages have been somewhat contradictory. The president of the European Commission, the German Ursula von der Leyen, assured last Wednesday before the European Parliament that there was a “path towards a pact”. “It may be very narrow, but it is there,” Von der Leyen said.
However, on Thursday, she had a telephone conversation with the British “premier”, Boris Johnson. And a spokesman for the Number 10 stressed later that “unless the EU position changes substantially”, an agreement would not be reached. The country’s deputy prime minister, Michael Gove, went one step further by assuring that the chances of white smoking are “less than 50%”.
The MEPs would have given a deadline of this Sunday at midnight. Otherwise, it seems very complex to be able to ratify the eventual text of more than 600 pages (which must then be translated into various languages). But, at this point, no one believes that the deadlines that have so often been missed have been met. For the moment, an extraordinary European summit is planned for December 28. From the beginning, governance, equal conditions and fishing have been the main stumbling blocks. And these last two issues are still being addressed today.
Nothing prevents both sides from continuing to negotiate in the future. But Johnson is adamant: “If we don’t get a deal now, we won’t go in January to restart the talks. “That’s not going to happen,” warns the Tory leader.
For certain sectors, the new scenario of quotas and tariffs as of January 1 would mean a radical change, among them, the agrifood, fishing or automobile sectors. Through the English port of Dover, which is the main connection with the English Channel, daily pass more than a million parts of the automotive sector that would have to stop at the border to verify their origin. If there is no agreement, there could be queues of 7,000 trucks for days.
Doug Bannister, executive director of the Port of Dover, called for urgent financial support from the Johnson government. But the authorities rejected a request for £33 million for French passport controls, allocating only £33,000 to the port instead. “We are trying to get through the most uncertain period this facility has ever seen,” he said.
The foreseeable problems in the Adunas also make one fear that there will be shortages of some products on the supermarket shelves, especially perishable foodstuffs. Not to mention the increase in prices. The supermarket chain Tesco, one of the main chains in the United Kingdom, estimates that the cost of the shopping cart will increase by around 5%, although the government leaves the calculation at between 2% and 3%. The British Retail Consortium (BRC) has warned that 85% of food imported from the EU would be subject to tariffs of more than 5%, including tariffs of 48% on minced meat, 16% on cucumbers and 10% on lettuce.
The collapse at the border would also affect the supply of vaccine at the height of the coronavirus pandemic. At the moment, the UK has only the first 800,000 doses of Pfizer vaccine, which it is already administering to its citizens out of the 40 million it requested.
With regard to fishing, the Royal Navy has been given new powers to arrest fishermen who enter UK waters illegally. The Navy is ready to deploy four patrol boats to detain and seize French fishing vessels, which would greatly increase diplomatic tension with Paris, with whom London now has to collaborate to deal with the illegal immigration of small boats from the English Channel. Without a trade pact, the European Union would, by the way, give up free access without quotas or tariffs for all canning industries to the important British market.
If there is a Brexit without a trade agreement, no legislation will regulate the transfer of data either, making it difficult for many digital services that depend on sending all kinds of information between countries to operate. And we must bear in mind that the service sector now represents 80% of the British GDP. Without a specific agreement on aviation, a tough economic Brexit would leave flights between the UK and the EU on the ground and both parties would also no longer have mutual access to their security databases, which will hinder the arrest and extradition of criminals, among other problems. There are now less than two weeks left to avoid the precipice.