UK – Examining the issue formerly known as Brexit

The British Prime Minister, Boris Johnson, won the most recent UK general elections with the slogan: “Get Brexit Done!” Now that he has achieved a comfortable majority in Parliament he wants to move on, and one of the first things he introduced was the ambition no longer to speak about ”Brexit” when referring to the process of the UK leaving the EU. Let’s help him and from now on refer to TIFKAB, The Issue Formerly Known As Brexit.

TIFKAB on January 31st, 2020

On January 31st, 2020 the UK will leave the EU. This will start the transitional period in which the UK no longer has voting rights in the EU, and it can start negotiating with other markets about trade agreements. The UK market will remain part of the EU Single Market, until a new agreement with the EU is reached or until the UK leaves without an agreement. This means that not much will happen in practice on January 31st. This situation is also referred to as BRINO (Brexit In Name Only).

Latest TIFKAB timelines

The EU will set up a negotiating team and a mandate for that team. This will take some time, so the EU will probably not be able to start before March 2020 with the negotiations. There is no information on the readiness of the UK negotiating team.

Time is critical, because June 30th 2020 is the last day the UK can decide to extend the transitional period. If an agreement is reached, this must be finalized by November 26th to get all in place by December 31st.  In practice this means there is a three-month timeframe for the negotiations to reach a point where negotiators trust there will be a positive result. The transitional period can be extended to a maximum of two extra years, but this means the UK will remain part of the EU for a longer period. The British Parliament has therefore supported the proposal for not using that extension. In the past we have seen the UK taking a firm position on those deadlines only to ask for extensions in the last minute. This is still possible. So far the UK did not want to jump into a no-deal scenario, and the EU did not want to push them off the cliff. But the current majority in the British Parliament may encourage players on both sides to do so now; the no-deal option is still a realistic option…