Here, the second deadline emerges: December 31, 2020, when the transition period is due to run out. Most experts and EU officials believe there is next to no chance that the two sides can agree on a free-trade agreement in the 12 months between next month’s U.K. election and this scheduled end of the transition period. It took Canada seven years to agree to its trade agreement with the EU. Even in the United States, which tends to be quicker than the EU at tying up trade deals, agreements take time—Washington’s FTA with Australia took 14 months to negotiate, for instance.
Despite the short window, Johnson has ruled out extending the transition period, claiming 12 months is plenty long enough. Brexiteers argue a U.K.-EU agreement is much simpler because the two start with total alignment of standards and regulations, given Britain’s membership of the EU single market. Yet this fundamentally misses the point: Any future trade deal will be concerned with how far Britain and the EU wish to diverge from each other—and to what extent divergence should reduce each other’s market access. Most trade deals are about bringing two economies closer together, not managing their slow drift apart, and therefore such a negotiation is fraught with political and technical difficulty.
Despite the time constraint, Johnson is under political pressure to rule out extending the transition period. His Conservative Party’s euroskeptic members of Parliament argue that the transition arrangement is a necessary evil, but one that should not drag on, because it amounts to “vassalage”—accepting EU law without voting rights to shape that law.
If no trade deal has been agreed on and ratified by December 31, 2020, Britain may leave the EU’s single market and customs union on simple “World Trade Organization terms”—the loosest, most basic form of trading relationship, stripping the U.K. of any preferential trading relationship.
According to former and current officials who spoke to me and who asked for anonymity, it’s now almost inevitable that there will be another Brexit crisis late next year (should Johnson win the election) because of these deadlines.
If Johnson refuses to request an extension by July, foreign-policy and trade experts in Brussels and London who spoke to me said it was all too obvious how the following six months would play out. First, Johnson will attempt to use the threat of “no deal” to pressure the EU to give into his demands for a quick and simple trade deal. However, according to two serving and former diplomats who spoke to me, the EU is likely to respond to such threats by turning the tables on Johnson by using the ticking clock to do the exact opposite—piling pressure on London to sign up to its demands, principal among them the so-called level-playing-field provisions—legal commitments written into most free-trade deals to maintain certain mutually agreed on social, environmental, and economic standards. Supporters of such provisions insist they are necessary to avoid a race to the bottom in rights and standards and protect businesses from unfair competition. Put simply, the EU does not want to see the U.K. suddenly adopt radically lower standards that give its businesses a competitive advantage.