Brexit Bulletin: Everybody Hurts
Brexit Bulletin: Everybody Hurts
Days to Brexit: 3
(Bloomberg) --
What’s Happening? Three days away from Brexit, the impact of the looming divorce is coming into view.
Brexit was a unilateral decision, arrived at by a majority of British voters in the referendum of June 2016. But, like any divorce, it was always destined to change the way ahead for both parties. (Non-divorcees can just watch “Marriage Story” on Netflix for a sneak preview.)
With Brexit stage one now a little over 72 hours away, both sides are digging in for the next set of negotiations, as Ian Wishart explains here. Arrangements for U.K.-European Union trade in the years to come will be the subject of contested negotiations throughout the rest of 2020. As we’ve reported often, Prime Minister Boris Johnson insists that he won’t ask to extend talks beyond the end-of-year deadline.
A hard-edged Brexit might well mean disruption for the U.K. But EU businesses also have plenty at stake. A Bloomberg analysis published today of the potential tariffs the U.K. could levy on EU exports bound for Britain shows that €47.3 billion ($52 billion) — 16% of the total — would likely be exposed to new charges if the former partners diverge sharply in 2021. The total of added costs for EU products would run up to almost €5 billion.
And it’s not just trade. The City of London is a cash cow for the U.K., but both sides have a lot to lose from a sudden break in cross-border financial-services, Lionel Laurent writes in Bloomberg Opinion. Both EU and British officials will have different priorities after Brexit, Laurent argues, and to reconcile their aims will require some clever regulatory footwork. “Neither side can really afford a ‘no-deal’ scenario.”
Elsewhere, today’s tightrope-walking by Johnson, who decided to grant Chinese telecoms firm Huawei a limited role in building 5G networks, emphasizes the new challenges the U.K. faces in striking out on its own. Johnson needed to balance the prospect of banning Huawei under U.S. pressure with the need to keep trading and talking to China on good terms.
Brexit had “one universally appealing premise,” Therese Raphel writes for Bloomberg Opinion: The idea that the U.K. could “chart its own course in the world, determine its own laws and adjudicate its own disputes.” The Huawei issue “ posed a devilish question that spoke to the limits of Britain’s new role in the world.”
And so it goes: For telecoms, read finance, and for finance, read trade. And we’re not even talking about fish yet.
Beyond Brexit
- Everyone’s favorite climate solution has a problem with fire.
- Americans will inherit $764 billion this year — mostly tax-free.
- The Pentagon will test hypersonic missiles that fly at five times the speed of sound.
Brexit in Brief
Migrant Wages | The U.K. should take steps to avoid worker shortages after Brexit that include lowering its proposed minimum salary threshold of £30,000 for migrants and creating a new route for the most talented people who don’t have a job offer, the Migration Advisory Committee said on Tuesday.
Talks Timetable | The EU will start talks with the U.K. over the future relationship after Brexit on March 3, the Guardian reports. The newspaper cites a leaked document as saying that without a deal by Dec. 31, 2020, “there will be a ‘cliff edge’ in many areas and ‘no return to the status quo’.”
End Times | Foreign Office Minister Chris Pincher became the last British government minister to attend a European Union meeting before Brexit, the BBC reports. Pincher said the U.K. and EU would remain “allies, partners and friends.”
Nothing to See Here | A £46 million ($60 million) advertising campaign urging Britons to “Get Ready for Brexit” before the aborted deadline of Oct. 31, 2019, had little effect, the U.K.’s public spending watchdog said.
Brexit Day | As the clock strikes 11 p.m. on Jan. 31, most Brits won’t notice much tangible difference. Most of the 10 immediate changes after Brexit will be seen in Brussels, says Matt Bevington, at The UK in a Changing Europe research unit based at King’s College London.
Life After Brexit
You can follow us @Brexit on Twitter, and listen to Bloomberg Westminster every weekday.
To contact the editor responsible for this story: Chris Kay at ckay5@bloomberg.net
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