- Britain is set to become the first country ever to exit the EU in 24 days — on January 31.
- This will kickstart a transition period, when London and Brussels will engage in new negotiations that will include future trade arrangements.
- Some policymakers have warned that trade talks might be more complex than the divorce negotiations witnessed from 2017 to late 2019.
Disagreement over Brexit trade talks will likely come to a head in London Wednesday with U.K. Prime Minister Boris Johnson due to meet with the president of the European Commission.
Britain is set to become the first country ever to exit the EU in 24 days — on January 31. This will kickstart a transition period, when London and Brussels will engage in new negotiations that will include future trade arrangements. However, both sides seem to disagree about the timeline for these talks.
Johnson has pushed for legislation to force trade talks with the European Union to end by no later than December. However, European Commission President Ursula von der Leyen has said that 11 months to put a trade deal together is an "extremely challenging" timeline.
A spokesperson for Downing Street said Tuesday night that Prime Minister Boris Johnson "is expected to tell President Von Der Leyen that, having waited for over three years to get Brexit done, both British and EU citizens rightly expect negotiations on an ambitious free trade agreement (FTA) to conclude on time."
"There will be no extension to the Implementation Period, which will end in December 2020 as set out in the Political Declaration," the spokesperson added.
Meanwhile, the recently-appointed head of the EU's executive arm said in December she is "very worried" about the chances of a cliff-edge moment at the end of the transition period. If there is no trade agreement between the U.K. and the EU, businesses could find themselves trading on World Trade Organization terms – potentially meaning higher tariffs and barriers to commerce.
"The meeting is really to discuss holistically the U.K.'s withdrawal from the European Union and to look forward to the year ahead in all of its dimensions," a spokesperson for the European Commission said Monday.
The same spokesperson added that von der Leyen's views "are very clear." "I am sure that she will discuss with the prime minister how to try to overcome these challenges and make sure we can come out with a positive agreement at the end of the year," the Commission spokesperson also said Monday.
Analysts will be monitoring Wednesday's meeting to understand when this next phase of negotiations might begin.
"There is no reason to assume that Brussels would row back on tough demands including questions of minimal regulatory compliance and fishing rights. No-deal risk therefore remains very real in 2020," research firm Teneo said in a note Monday.
Some policymakers have warned that trade talks might be more complex than the divorce negotiations witnessed from 2017 to late 2019. Apart from new trading arrangements, negotiators will also have to reach agreements on security and data sharing; aviation standards; supplies of electricity and regulation of medicines.
"In public, the (U.K.) government will maintain its hard line on diverging from EU regulations, and rejecting Brussels' demand for a level playing field. In practice, Johnson will likely prove more pragmatic," Mujtaba Rahman, managing director at the research firm Eurasia, said in a note Monday.