The deadline for a post-Brexit trade deal has been pushed back to Sunday 13 December following a meeting between UK Prime Minister Boris Johnson and EU Commission President Ursula von der Leyen. Professor Abhinay Muthoo from our Department of Economics argues that we can still see a deal being struck - and that both sides are still playing a game of 'chicken'.

Professor Muthoo said: "After yesterday's (“emergency”) meeting over dinner in Brussels between the UK Prime Minister Boris Johnson and the EU Commission President Ursula von der Leyen, it would seem that the (post Brexit) trade negotiations between the UK and the EU are now likely to fail. That a no deal outcome is now considered highly likely. That is what I expect will be what people expect.

"But, despite the failure at last night's dinner to unlock the UK-EU trade negotiations, I remain confident that a deal will certainly be struck. The few remaining issues are non-economic in nature, and can be summed up as a conflict between the issue of the sovereignty of the UK and the issue of the integrity and principles of the EU. Both parties need to make some compromises on these issues, and they will, at the right time, and a deal will be struck.

"For now, the parties are not compromising on these remaining non-economic issues. They continue to play a somewhat dangerous game of “Chicken”. Each side wants the other side to make compromises first. There remains a good chance that both sides will make the necessary compromises on this side of the new year. But there is a possibility that the necessary compromises are only made in the new year (after some painful disruptions). Either way, a post-Brexit trade deal between the UK and EU will happen."

10 December 2020

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Peter Thorley
Media Relations Manager (Warwick Medical School and Department of Physics)

Email: peter.thorley@warwick.ac.uk

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