As we enter the third decade of the 21st century, here is an overview of what to expect from European politics in 2020.
1. Brexit – or at least a ‘beta version’ of it – will happen
At the end of January, the UK will finally leave the EU, even if for the rest of 2020 it will continue to outsource its regulation-making capacity and trade policy to Brussels, in return for full EU market access. Boris Johnson has promised not to extend this transitional arrangement beyond 2020. A decision on that is due by the end of June.
There are two schools of thought as to what the UK will opt for. Some argue that there simply isn’t sufficient time to negotiate anything beyond a ‘bare bones’ trade agreement and that both sides will ultimately settle for that, with all its repercussions for industry.
Others think that while a deal to avoid tariffs and quotas is feasible, Boris will ultimately make major concessions, due to the damage industry would face from so-called ‘non-tariff barriers’ to trade. They think that as a result, the UK would simply agree to continue to take over most, or even all, of the EU’s rules in return for continued full market access because of the lack of time to negotiate market access dependent on UK regulatory alignment. In this scenario, Boris could perhaps argue that because the UK has at least recovered part of its sovereignty, this does not amount to extending the transition.
It’s very possible that the first school of thought is right and that Boris simply will go for ‘full regulatory divergence’ from 2021. Perhaps the resulting disruption may end up being a lot less disastrous than some predictions foresee.
Then the ultimate question would be: why would the UK opt to sacrifice market access in return for the right to diverge when it would not be planning to change many of the rules in place anyway just yet? Intransigence and path dependence may well keep the UK in the EU’s regulatory orbit for a few years.
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