No-deal Brexit

While there has been tension between Paris and Berlin over how hard to push the UK in this last, crucial stage of negotiations over fish quotas and an oversight body for any deal, there is little sense of any tension in Downing Street over the prospect of a sudden stop to trade and cross-border collaboration on January 1, when the UK formally leaves the EU.

Indeed, most people in Johnson’s government have ceased to fear no deal.

At the referendum on EU membership in 2016, British people voted to leave the EU for a variety of reasons; but the reason the Conservative right wing wanted to leave was in order to free the UK from EU standards on workers’ rights, consumer goods and the environment. Given that, the only way the EU can give Britain’s exporters access to its market is if there are penalties agreed in advance for divergence from these standards.

So, the point at issue is: does Britain leave the EU without a deal and face immediate tariffs on its exports, or does it agree to a mechanism for those tariffs to be imposed in future? Without a complete cave-in by Brussels, allowing the UK full access with no concomitant rules, there is no third option.

The economic cost of no deal to the UK would come quicker, and be higher, but in either case, the form of Brexit the UK government wants is “hard.” Boris Johnson’s negotiators and advisers calculate that the difference between a “thin deal” and no deal is not worth worrying over.

With the UK’s budget deficit on course to hit £394 billion ($524 billion) this year – compared to just the £19 billion forecast before COVID-19 hit – Johnson’s calculation must be that the economic hit from no deal can be swallowed up in the much bigger downturn, and resulting debt pile, created by the pandemic. The London School of Economics has estimated that a no-deal Brexit might reduce GDP by 8 percent over a decade: COVID-19 has reduced it by 9 percent in just six months.

Though this final stage of the talks has been dogged by the issue of fishing, which employs just 12,000 people in the UK, the real issue is equivalence and oversight: does the UK have to maintain standards in its goods-producing economy – for example, food and automobiles – that are equivalent to those in the EU, and what body arbitrates over any disputes?

So, as we go into the final phase, there is a real danger that no deal will happen.

The right-wing section of Johnson’s party – the 59-strong European Research Group (ERG) – has always wanted to see either a no-deal Brexit or a total climbdown by the EU.

For them, and for their supporters in the party, many of whom were once members of the UK Independence Party (UKIP) or the Brexit Party, slamming the door as they leave the EU is just one objective. The group has begun to formulate a wider policy platform: 28 MPs, for example, signed a letter attacking Cultural Marxism.

Excerpted: ‘A ‘no-deal’ Brexit will be devastating’ Aljazeera.com