A quick EU trade deal for Britain is unlikely

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As the formal Brexit date of the 29th March 2019 grows ever closer, speculation over what arrangements and trade deals can be worked out before then has reached fever pitch.

The markets and the participants of the talks all “remain confident” a deal can be reached. Even when the possibility of talks failing to achieve a trade deal is brought up, it is often dismissed as unlikely.

The British government and the European Union may indeed negotiate a continuation of current trade deals, of which Britain could potentially remain a part, for a time at least.

A whole new trade deal is another matter entirely.

Trade deals are notoriously difficult to negotiate even when only attempting to look after the competing interests of two nations.

Putting together a framework where both sides sufficiently benefit is a gruelling process. In the case of the EU, it’s not just two sides that need to walk away satisfied, it’s the nation making the deal and the EU’s 28 member nations.

According to the European Court of Justice (Europe’s highest court), EU trade agreements that deal with regulatory or investment issues must be ratified at multiple levels. In these types of instances, for example the Canada – EU free trade agreement. The approval of the EU council, EU Parliament, the national assemblies of all 28 member nations and certain sub-national bodies is required before the deal can be fully enacted.

The Canada – EU trade agreement took 7 years to negotiate and was 22 years in the making. It has been nearly two years since the deal was signed, but it has only been ratified by 9 of the required 28 EU member nations. So the full agreement is not yet entirely enforceable and parts of it are only provisionally applied.

Despite over two decades in the making, the Italian Parliament is currently attempting to block its ratification, a move that could potentially sink the entire deal.

So what does that mean for Britain?

The cost of bowing out of the EU without a trade deal is currently estimated at £27bn a year to UK companies and an additional £31bn to their EU counterparts.

The British ambassador to the EU privately told the government that a trade agreement with the EU may take 10 years to negotiate and then still potentially fail to be ratified.

The complexities of EU internal politics and the plethora of political speed bumps will likely ensure any potential Britain-EU trade deal will take a considerable amount of time.

That doesn’t even begin to take into account the likely issues Theresa May’s embattled government may face in negotiating any trade deal.

Given the current governments extremely slim majority, having the political mandate to push through a deal that may prove unpopular with elements of British indistry, could potentially be a terminal battle for the Prime Minster’s leadership.

There may indeed be some EU member states that are extremely keen on a good, quick deal for Britain, for example Germany. However considering the extremely complicated process EU trade deals can potentially entail, a quick sweetheart deal for Britain seems very unlikely.

If for any reason your interested in the ins and outs of the 30 step EU trade agreement process, there is a guide to the process here.

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