The last day of January was “Brexit day”, the moment the UK officially left the EU after years of negotiations and parliamentary wrangling.
Whether you think it was a cause for celebration or sorrow you would be forgiven for thinking Brexit was done and you’d never have to hear about it again.
However, the transition period is going to last until the end of the year so the UK won’t actually be properly leaving for a good while. Things will essentially stay the same for the time being, which is good for the UK as it still needs time to sort things out.
The remaining 11 months of the year will involve trade negotiations. It’s a complicated process that will cover tariffs, quotas, rules and regulations.
What does the rest of the year’s Brexit work involve and what is the government actually aiming for?
Government ministers have been quick to say there won’t be as much alignment and closeness with the EU as first thought. The more alignment, the closer the UK will be to the EU and essentially the softer the Brexit will be.
It will also be easier to get a trade deal if the UK’s rules don’t go too far from the EU’s, there is less need for checks and barriers if the rules are the same on both sides of the border.
Avoiding close alignment doesn’t mean a trade deal can’t be done but it does mean there will be more barriers and a need for border checks on certain goods. More checks, more tariffs and more need for border activity adds up to a harder Brexit.
Boris Johnson also talked tough, with The Guardian reporting the prime minister was aiming for “no concessions” and “no alignment whatsoever”.
Johnson indicated his priority was going for a “Canada style” trade deal, which involves mostly free trade but still has customs and VAT checks.
He said it would be a “very unlikely event that we do not succeed”, but remarked that if he couldn’t get the trade deal he wanted then the UK would aim for something looser like the arrangements Australia has with the EU.
The Counter claim
At this early stage in the year of Brexit much of what politicians say should be taken with a pinch of salt, this is a negotiation and these are the opening stages of trade talks.
Johnson claims he won’t make concessions right now but that’s a position he likely expects to be coaxed away from with the EU offering concessions of their own.
However, the prime minister has been criticised for adopting a “scorched earth” policy to trade negotiations, with accusations that an Australia style agreement would be “no deal in all but name”.
The government’s aim for a Canada style deal hits the problem that the UK is not Canada. It is much nearer, with more movement of people, goods and services as a result.
No trade deal once the 11 months are up means WTO terms, which would mean full checks and tariffs on the 49 per cent of the UK’s trade which goes to the EU.
Trade talks currently focus on goods rather than services. However, services make up 80 per cent of the UK’s economy and 40 per cent of its exports. The UK is the world’s second biggest exporter of services behind the US.
Around 11 per cent of the UK’s trade comes with countries which have trade deals with the EU and Brexit will mean those deals are lost if arrangements aren’t put in place.
The UK has managed to roll over 20 agreements with 50 countries which amounts to around eight per cent of British trade.