In mid-June, Boris Johnson said he did not want to request an extension of the transition period for the completion of negotiations with the European Union.
During this week, David Frost, British chief negotiator for Brexit, met Michel Barnier, EU chief negotiator, to continue the discussions. However, Michel Barnier said yesterday that there are still serious differences after four days of tight negotiations. Therefore, the no-deal seems to be increasingly likely.
But let’s see in detail what the no deal is and what its consequences would be.
The no-deal symbolizes the exit of the United Kingdom from the European Union without an agreement between the parties. On 1 February 2020 the transition period officially began in which the United Kingdom and the European Union will have to find a commercial agreement. If no agreement is reached by the end of 2020, then the United Kingdom will officially leave the European Union without an agreement from 1 January 2021 and thus the no-deal will occur, which will have serious consequences for both parties.
Following a no-deal, relations between London and Brussels would be regulated by the World Trade Organization (WTO) and this would result in the introduction of new duties, tariffs and customs controls.
The no-deal would trigger a period of profound differences from the European Union as we know it today. This would certainly be a very demanding period for both parties, during which relations between the United Kingdom and the European Union would change substantially.
To date, it does not seem that easy to reach an agreement, given that in order to be approved, it should obtain the consent of all member states.
If you want expert advice for your business to better face this period of uncertainty, do not hesitate to contact us at info@well-tax.com.
Photo by Jonathan Rolande on Foter.com / CC BY
