COVID-19: Brexit And An Extended Transition Period

Britain officially left the European Union (EU) on 31 January 2020. Now, under the EU (Withdrawal Agreement) Bill, the UK has launched into a year-long transition period. During this time, it is to deliberate on trade, travel and business agreements.

With barely 8 months left, EU officials have said that the possibility of agreeing a trade deal by December is “fantasy land”. On top of this, COVID-19 has significantly delayed Brexit discussions, and resources have been redistributed to deal with the ongoing crisis.

Subsequently many have said that an extension of the transition period is “virtually inevitable”, however the government insists that it will not agree to an extension, even if the EU requests it.

Lack of progress

Following the latest round of post-Brexit talks, the EU’s chief negotiator Michel Barnier has criticised the UK government for its lack of progress. Drawing attention to four areas where the UK’s lack of progress was “particularly disappointing” Michel Barnier pointed to fisheries, the role of the European Court of Justice, the level playing field and the governance of future partnerships.

According to Barnier, the UK has “not put forward any legal text” in regard to fisheries, and further to this stated that “no progress” has been made. Meanwhile, Barnier also outlined that the UK has “failed to engage substantially” in relation to the subject of the level playing field. It  has also reportedly failed to supply firm guarantees on fundamental rights and individual freedoms. Emphasis was subsequently placed on the importance of maintaining adherence to the European Convention on Human Rights.

The government has subsequently been accused of stalling, by “slowing discussions” on key areas. Barnier elaborated: “The United Kingdom did not want to engage seriously on a certain number of fundamental issues”.

Possible extension

It is possible to extend the transition period by up to two years if both sides can come to an agreement by July. However, a spokesperson for the government has outlined that the transition deadline of 31 December 2020 is “enshrined in UK law,” and moreover, the Prime Minister, has “no intention” of changing this.

Despite this, according to the Focaldata survey of more than 2,000 voters, two-thirds reportedly want the transition period to be “indefinite”. The remaining voters said that it should be extended by a year. The survey also found that 49% of Leave voters agreed by supporting an extension.

Another significant factor influencing the need to extend the deadline involves civil service resources. Much of that which has been allocated to solving the Brexit issue is now being used to keep the country afloat amidst COVID-19. As a result, many suggest that an extension is vital to ensure that a comprehensive free trade agreement is established.

On top of this, the virus and subsequent UK-wide lockdown has done immeasurable damage to UK business, with both SME’s and big name brands falling into administration and closing down. Consequently, many fear that UK businesses will not be prepared to take on the additional pressure of significant changes to trading relationships.

Perhaps more concerning is that if the UK does not seek an extension, and the country sees further waves of the virus after December 31 2020, there could be serious disruptions to supply chains. This could seriously impact the UK’s ability to access medical supplies.

Despite this, the UK government has remained firm that it will not budge on its decision. Former Brexit secretary David Davis, for example, has stated there is “no reason” to delay. This is a sentiment echoed by Leader of the House of Commons, Jacob Rees-Mogg who said: “There is absolutely no need to extend the transition period”.

Meanwhile, Norbert Röttgen, Chair of the Bundestag’s Foreign Affairs Committee has staunchly disagreed with this view. She stated: “Given this situation, I don’t believe that there is a realistic possibility any longer to even achieve the necessary minimum”.

However, as the UK struggles to supply sufficient PPE and respirators to NHS workers, and the deadline for extension looms, the government is faced with an important decision which will ultimately show what it values more. Either it chooses to delay this arbitrary deadline and focus on lifting the country to stability, or it will choose to progress with the deadline, divert its attention from COVID-19 and risk further economic instability.

Uncertainty ahead

Some have warned that without an extension, the UK may jeopardise its inclusion within the Lugano agreement. This governs which country’s courts have jurisdiction in civil and commercial matters across borders.

While the UK is no longer an EU member state, it is still part of the convention under the Withdrawal Agreement. However, this month it formally applied to become an independent contracting party in the convention. Even so, in order for its application to be accepted, it must receive approval from the Council of the European Union. Unfortunately, acceptance seems unlikely. On 17 April, in a European Commission meeting attended by diplomats, a national official said that the commission, “will surely not make a positive recommendation”.

In addition to this, Joe Owen, Program Director for The Institute for Government argues that the impact of COVID-19 is likely to delay the “perceived” benefits of Brexit, including increased control of borders, immigration and big trade deals. Speaking about the political consequences of COVID-19 he said: “There will be no big trade deals negotiated while the world’s governments are similarly distracted by the pandemic. There is little immigration to control when travel is suspended. Regulatory freedom makes little difference to an economy in deep freeze. With the benefits being delayed, it makes little sense to reject a delay to the cost”.

So, the question is: will the government buckle to extend its perceived purgatory, and prevent potentially ruinous results? Or, will it continue forward dragging the country behind it kicking and screaming? Only time will tell.