After Michel Barnier confirmed on Friday that there were ‘just a few hours left’ for a trade deal to be agreed between the UK and the EU, the bookmakers have taken the majority of their money on a ‘no deal’ scenario playing out.
The EU’s chief negotiator offered the smallest chink of light by hinting that there was an outside chance of a deal being struck, but that the ‘path is very narrow’ and – presumably – the UK’s negotiating team would have to succumb on some of the major stumbling blocks that are preventing an agreement being made.
Boris Johnson himself has suggested that a no deal is the likely outcome, given that both parties are still at odds on the major differences in fishing rules and the ‘level playing field’ that would ensure fair trade in 2021 and beyond.
The PR gurus at 10 Downing Street have formulated a statement in which they describe the Prime Minister as ‘making every effort’ to accommodate the EU’s requests on the level playing field, but that the fishing debate is not seeing any forward momentum. “On fisheries he [Boris Johnson] stressed that the UK could not accept a situation where it was the only sovereign country in the world not to be able to control access to its own waters for an extended period, and to be faced with fisheries quotas which hugely disadvantaged its own industry.
“The EU’s position in this area was simply not reasonable and if there was to be an agreement it needed to shift significantly.”
Talks are ongoing, but if a deal is not agreed by December 31 – and remember, politicians will be enjoying their ‘small and selective’ Christmas in-between – then both the UK and the EU will subsequently trade under World Trade Organisation (WTO) rules, and that could see significant charges and levies on imports and exports being imposed….leading to a price increase for the consumer.
Currently, there is no legal position for an extension to be sought, as the Brexit withdrawal agreement specified the date by which a trade deal should have been reached.
Something Fishy Is Going On
Cod and herring….incredibly, fishing is one of the main stumbling blocks preventing a deal being reached.
The UK and EU negotiators have come to a deadlock over how fishing waters – and the right to plunder them – are divvied up, with the Prime Minister wanting to minimise the access that European fishing vessels have to British waters. As of January 1, 2021, the UK will operate outside of the Common Fisheries Policy (CFP) agreement created by the European Union.
And with the fishing industry contributing around £1.4 billion to the UK economy, you can see why Boris and co want to regain sovereignty over the aquatic battleground.
The other major stumbling block for negotiators is the so-called level playing field. Basically, as of January 1, the UK can agree pretty much any trade deal it wants with any country – aggravating the EU who want a ‘fair competition’ standard put in place.
The consequence is that a business in Britain who wants to access a European market or supplier is likely to be faced with unfavourable conditions, and so they may look to India or China for a substitute. That is fine, in principal, if the necessary quality and safety standards can be guaranteed, but if they can’t then ultimately it’s the consumer that suffers with below-par products at increased prices.
On the flipside, the UK would take over rule-making and could cut the costs of production domestically, while creating new jobs into the bargain. They could also adopt new regulations regarding the environment and workers’ rights.
Deal Or No Deal?
All of the signs point towards a No Deal then, and punters have been quick to get involved.
The odds on a ‘No Deal’ scenario have been slashed from 2/1, which was widely available as recently as last Monday, to 4/7 at the time of writing with many of the leading bookmakers.
Oddschecker reported that more than half of all bets they took were on a No Deal last Friday, and the firm’s spokesperson Callum Wilson said: “The odds suggested a fairly rosy picture at the beginning of the week, but days later and we’re looking at a betting market that’s flipped on its head.
“Back in June 2019, Boris Johnson quipped that the odds of a no-deal Brexit were ‘a million-to-one’ and given today’s prices anyone sat on a bet slip at those odds will be toasting the Prime Minister.”