Will Post-Brexit Trade Talks be Delayed Because of Coronavirus?

Alasdair Lane

The coronavirus crisis has ground global economies to a halt. Businesses have been shut, transport links cancelled, and sports tournaments scrapped. But as it stands, one thing appears impervious to the pandemic’s disruption: post-Brexit trade talks.  

Post-Brexit Trade Talks Continue

The negotiations on Britain’s future with the EU have been eclipsed by Covid-19 in the news agenda, but behind closed doors, they are continuing. Given the pressure facing governments across the continent, that’s truly staggering. 

Indeed, the discussions have been blighted by the illness in a very personal way — lead EU negotiator, Michel Barnier, has tested positive for the disease, while his UK counterpart David Frost is said to currently be in self-isolation with virus symptoms. There had been hope that their teams might continue to meet, but, as huge swathes of Europe went into lock-down last week, face-to-face talks were cancelled. Teleconferencing technology was then suggested, but it proved equally unviable: dozens of officials crammed around webcams would have infringed on social distancing rules. 

Diplomatic Void

So now the opposing sides find themselves in a diplomatic void, determined to continue their negotiations but without any obvious means to do so. At the current stage of the talks, that poses little problem — both UK and EU representatives are busy analyzing the other’s legal documents, which amount to well over 400 pages each.

The next leg of the discussions will be harder to navigate. In a strident move last month, British prime minister Boris Johnson said he was willing to walk away from the negotiating table if insufficient progress had been made by July. 

The testiest areas of discussion — security, foreign policy, fishing, and more — must therefore be thrashed out in a little over twelve weeks. Achieving this will require intense and prolonged diplomatic bouts in which the individual officials’ personal relationships will be crucial. Whether genuine progress can be made without physical proximity in these high stakes talks is doubtful, experts say.

Coronavirus Has Led to Many Departments Being Short-Staffed

Negotiators must also be mindful of the situation back home. Facing off with the worst pandemic in a century, governments across Europe are under unprecedented pressure. In the UK, civil servants working for department vital to Brexit preparations — not least the Treasury — are reportedly being drafted into Covid-19 crisis teams. Acknowledging the enormity of the public health emergency, Johnson admitted last week that Brexit was “not a subject that is being regularly discussed” at the moment.        

With that in mind, it seems logical that London would request an extension to the talks. It’s certainly an option at their disposal: under the Withdrawal Agreement signed last year, negotiations can be prolonged for two years to allow for a breakthrough.  

All Eyes on Johnson

But Johnson has staked his legacy on delivering Brexit: any move that delays Britain’s departure from the EU institutions is feared and loathed at No. 10 Downing Street. 

In Europe, on the other hand, an extension is likely to be met with welcome. The UK’s withdrawal from the bloc has left a €65 billion hole in Brussels’ budget — a gap officials are struggling to fill. 

If talks were to be extended while the world wrestles with Covid-19, Britain would be obligated to continue monetary contributions. This would appall the UK government’s fiercely pro-Brexit leadership, but given the historic threat that all nations are facing pragmatism may have to trump ideology. 

Withdrawal Will Have Major Financial Consequences

The economics of Britain’s EU exit must also be considered. Experts are in near-unanimous agreement: withdrawal will have financial consequences. In more stable times, this might’ve amounted to an insignificant economic blip.

But in the current climate, no country can afford a downturn, however minor. Covid-19 has brought European business to its knees, with analysts warning of historically deep recessions in the coming months. Taking this into account, failing to postpone Brexit — and thus delay the economic stress it will likely cause — would appear foolish. 

But in any negotiation, advantage must be seized wherever it is found. Britain entered the crisis in a stronger financial position than the EU: national debt was 7% lower than the continent’s average, with unemployment rates almost half. If, accordingly, the UK can weather the economic storm of Covid-19 better than Europe, its negotiating power would be boosted.

Still, pandemics are unpredictable beasts and there’s no telling who may come out on top when it all blows over. This is perhaps one of the reasons why the British public appears pro-extension: a recent YouGov poll found 55% of Brits favored postponement, with 24% against.  

Whether Johnson — who himself has recently tested positive for the coronavirus — will listen, only time will tell.