No one could have been surprised by Michael Gove’s recent comments that there would be no extension to the transition period beyond 31 December and therefore negotiations over an FTA need to be completed by the end of the year. This was despite calls from leading politicians in the UK and political and economic commentators that COVID was a ‘game changer’ and provided the UK government with a perfect political excuse to change tack and seek an extension to the transition period either formally or by using some other political ‘fudge’. Indeed, the cynics may say that COVID-19 has brought about the ‘perfect storm’ for the UK government by allowing them to blame any economic downturn resulting from the UK’s departure from the EU on COVID-19; masking the impact on the extreme adverse economic downturn that COVID is forecast to bring on developing and developed countries alike.
A comprehensive FTA was never on the cards. The time available within the transition period, something less than 12 months, was always going to be too short to allow the parties to complete what are time consuming, complicated and detailed negotiations.
Whilst a revised timetable of mid-August for an outline deal will be missed and we can expect to see further posturing from both sides, COVID-19 or not, an agreement(s) between the UK and the EU which provides the basis for trading with no barriers and no quotas and avoids WTO rules, is something both sides wish to achieve. The recent breakthrough in what until now had been something of a “political impasse”, will allow negotiations to continue so that through a series of mini-trade agreements the foundations for a FTA can be laid down before the end of the transition period, with the prospect of both sides eventually agreeing to a comprehensive FTA in the coming years.