New Brexit deal would damage UK-EU trade relations

Subject

Economic impact of Brexit.

Significance

The latest Brexit deal differs significantly from that agreed by former Prime Minister Theresa May. The United Kingdom (except for Northern Ireland) will leave the EU’s customs territory. Moreover, if the UK government refuses to sign up to “level playing field” provisions, any future EU-UK trade deal is likely to be considerably more limited in scope. As a result, the long-term economic impact of Brexit will be greater.

Impacts

• The key issue concerning trade talks is the extent to which London is prepared to accept constraints on its future regulatory flexibility.
• Substantial regulatory divergence could damage future UK-EU security and defence cooperation.
• It is possible that the United Kingdom will leave the EU at the end of 2020 without a trade deal in place.