London: Incoming British Prime Minister Boris Johnson has 100 days to deliver on his promise of leading the United Kingdom out of the European Union (EU).
The Brexit deal his predecessor struck with the bloc is “dead,” “defunct” and “needs to be junked,” he said during the leadership campaign. He’s vowed to renegotiate Brexit, and to quit the bloc on October 31, with or without a deal to smooth the split.
With Johnson confirmed as the next leader of the Conservative Party and British prime minister, the outlook for the British economy has become murkier – and potentially more perilous. His comprehensive victory over Jeremy Hunt has made it more likely that Britain could leave the European Union on Halloween without a withdrawal agreement, a prospect that even the most ardent Brexit believers concede would be disruptive in the short-term.
A “no-deal” Brexit means that on November 1, tariffs will be slapped on traded goods between the UK and the remaining 27 EU countries. Other impediments to trade would be imposed, such as new restrictions on the movement of people, customs and regulatory standards.
So what’s Johnson’s strategy, and what stands in his way?
Proposal: Renegotiate Brexit Deal
Johnson wants to scrap the deal Theresa May struck and restructure the whole negotiation that was agreed at the start of the process. The most controversial element of May’s deal is the so-called Irish backstop, a fallback measure to ensure the border with Ireland remains open whatever future trading terms the two sides eventually agree on. He wants to postpone any talks about the border until after the UK has left the bloc, arguing they should be part of future trade negotiations.
Obstacles: The EU has repeatedly said it’s not prepared to renegotiate the Withdrawal Agreement, and it’s the only deal on the table. It’s also said a backstop must be part of any withdrawal accord, because it wants to lock in a guarantee that no hard border will emerge.
The exit bill is also part of the divorce deal, and is due to be paid whatever trade terms are eventually negotiated. EU law dictates that Brexit should happen in two parts: First the exit negotiation, and then formal trade talks can begin.
Proposal: Leave on October 31 “Do or Die’
Johnson has said that after May twice delayed Brexit, the UK must now leave the bloc on October 31, “do or die,” whether a new deal has been negotiated or not. He’s refused to rule out suspending Parliament - known as proroguing — to achieve that.
Obstacles: The timetable is tight to negotiate an entirely new deal. And the UK parliament is opposed to a no-deal Brexit. That was made clear again last week when Conservative rebels joined the opposition to pass an amendment aimed at preventing Johnson suspending Parliament. The EU side has indicated it would prefer another extension to a no-deal split.
Proposal: Standstill period after Brexit
Johnson is seeking to negotiate a “standstill” period with the European Union after October 31, during which there would be zero tariffs and zero quotas to “smooth things over for business” — much the same as the transition period negotiated by May. He said it would end “well before the next election,” which is due in 2022.
Obstacles: The EU has said any form of transition period is contingent on there being a withdrawal agreement, which must contain an Irish backstop.
Proposal: Use WTO rules if EU won’t cooperate
Johnson said if the EU won’t offer a new deal, the UK will be able to use Article 24 of the World Trade Organisation’s General Agreement on Tariffs and Trade to ensure terms of trade remain the same after Brexit.
Obstacles: The clause Johnson cites applies to countries negotiating a trade deal rather than a country leaving a trading bloc. It would also require the agreement of the EU, and a clear timetable for the negotiation of a trade agreement — neither of which would be guaranteed in the event of an acrimonious no-deal Brexit.
