UK and EU agree to keep talking but warn ‘no-deal Brexit’ is now likely

7 min readDec 13, 2020

The United Kingdom and the European Union have warned a no-deal Brexit was now likely, even as they agreed — once again — to extend trade talks beyond a self-imposed Sunday deadline.

The talks were initially extended until Sunday after Wednesday’s meeting between European Commission President Ursula von der Leyen and the UK Prime Minister Boris Johnson, billed as a “last-ditch effort,” ended without an agreement.

No new deadline has been announced on Sunday, but von der Leyen said it was “responsible” to go “the extra-mile,” adding that she had “constructive and useful” phone call with Johnson.

Speaking in London, Johnson said the two sides remain “far apart on key issues,” and warned that “the most likely thing now is we have to get ready for WTO terms, Australia terms,” he warned.

Australia doesn’t have a free trade agreement with the European Union, even though talks to secure one are in progress. The expression “Australia terms” has been widely used by Johnson and his government as an euphemism for a no-deal Brexit.

But the term is misleading, because Australia and the EU already have a Mutual Recognition Agreement, which makes it easier for manufacturers to secure the regulatory approvals needed to sell their goods. However, the UK doesn’t have such an agreement with the EU.

If no deal is agreed, it would be forced to trade with the bloc according to rules set out by the World Trade Organization. That would mean new tariffs and other barriers, such as regulatory checks and paperwork.

The British PM said his government will continue to try to reach a trade deal, but warned there may not be a resolution by the January 1 deadline. “I do think there is a deal to be done but we remain far apart on key issues.:

“And we have to take back control of our fisheries,” Johnson said.

The European Union and the UK have been trying for months to agree on a trade deal before the Brexit “transition period” ends at midnight on December 31. Earlier this week, a joint statement by Johnson and von der Leyen cited three “critical” sticking points: fishing rights, the UK’s ability to diverge on EU standards, and legal oversight of any deal.

Failing to reach a trade deal would be economically painful for both the EU and the UK, although the impact on the UK would be disproportionately larger, because the EU is by far its biggest trading partner. Losing access to its single market would cut UK’s businesses off from Europe’s 450 million consumers, and burden them with extra tariffs and red tape.

The UK Office for Budget Responsibility (OBR) estimates that a no-deal Brexit would knock off £40 billion ($53 billion), or 2%, of the UK’s economic output in 2021, and leave more than 300,000 people unemployed by the second half of next year.

However, the OBR said in November that even if London and Brussels can reach a deal, their new trading relationship is expected to lead to a long-run loss of output of around 4% compared to Britain remaining in the European Union.

Ireland, which stands to lose the most on the EU side, said it was “absolutely imperative” that the UK and the EU reach a post-Brexit deal. The Irish Prime Minister, or Taoiseach, Micheál Martin told the BBC on Sunday that a no-deal scenario would be “so damaging to workers” in the UK, Ireland and across Europe, and represent “an appalling failure of statecraft.”

Johnson said on Thursday that he had directed his cabinet to prepare for talks to fail, and the EU has released plans aimed at keeping its borders open to commercial aircraft, trains and trucks.

The UK Ministry of Defense said Saturday the UK will have “a range of robust enforcement measures” available at the end of the Brexit transition period, including “numerous” offshore patrol vessels available in its territorial waters.

Four offshore patrol vessels “will be available to patrol UK waters to assist other government departments where needed,” the ministry said.

The Sunday Telegraph says a multi-billion-pound bail-out package is being drawn up to support industries which will be hardest hit by a no-deal Brexit. The proposals include help for sheep farmers, fishermen, car manufacturers and chemical suppliers — sectors which the paper says could be hit by tariffs in the event that no agreement is reached. A story on customers being automatically switched to the best energy deals as part of government plans to prevent so-called loyalty penalties is also featured.

The Sunday Times says supermarkets are stockpiling food after being told that a no-deal Brexit was a possibility. The paper says emergency planners predict it could lead to panic buying on a “scale that could dwarf the coronavirus crisis”. It also reports NHS bosses have warned that relaxing Covid rules at Christmas will cause a third wave of the pandemic.

The Sunday Express says “We are ready” for no-deal. The Brexit-backing paper says detailed plans have been drawn up to cope with potential disruption on 1 January in the event of no-deal. There is also a picture of the Duke and Duchess of Cambridge’s Christmas card featuring a beaming Prince Louis.

“Hours from a no deal” is the Sunday Mirror’s Brexit headline as it reports the UK prime minister saying the offer on the table is “still unacceptable”. It warns there are fears of “huge food price rises and job cuts”.

The Sunday People runs the heart-warming story of three-year-old Stanley Dalton with the headline “My Xmas cancer miracle”. It says Stan has had “pioneering” treatment in Singapore, thanks to “kind strangers”. Like its sister paper the Sunday Mirror, the People also carries a tribute to actress Dame Barbara Windsor who died on Thursday.

The lead in the Sunday Times says “ministers warn supermarkets to stockpile food”. It says food producers believe that leaving the EU without a trade deal will lead to a three-month shortage of vegetables. An unnamed consultant to one of the supermarket chains tells the paper: “Ministers are hugely worried about panic buying. They saw what happened over Covid, and know how quickly it can go wrong”.

Under the headline: “They think it’s all Dover”, the Sun on Sunday explains that many of the government’s contingency plans focus on the port where most lorries arrive from the EU. The measures include hiring up to 900 extra border staff, and bringing hundreds of extra police officers to Kent from other areas. The paper’s leader states: “Nobody denies that a no-deal Brexit will initially be bumpy for Britain’s economy — but the ultimate financial cost of accepting the EU’s disgracefully one-sided deal would be far greater.”

“Tory grandees’ fury over PM’s nationalist no-deal Brexit” is the Observer’s lead. It says Boris Johnson is facing a “rising tide of anger” from senior Conservatives. Writing in the paper, the former Tory deputy prime minister Lord Heseltine says he knows cabinet ministers who believe — like he does — that this is “quite simply the worst peacetime decision of modern times”. But he adds that he “cannot understand their silence”.

The Sunday Telegraph reports that rural parts of England — which had hoped to move to a lower Covid alert level than neighbouring urban areas, with more cases — are likely to be disappointed. It says Boris Johnson had suggested a review of tier allocations — due on Wednesday — would result in local variation, rather than one alert level across whole regions. But the paper says the Health Secretary Matt Hancock has written to Conservative MPs telling them the evidence suggests such a strategy does not work.

According to the Sunday Mirror, British engineers have invented a “miniature Covid-19 vaccine factory” — which can make 30,000 doses of the jab per day. The device — which is about the size of a supermarket trolley — uses computers to mix up the tiny amounts of active substances in each injection. The paper explains that scientists at King’s College London came up with it as a possible solution to producing the vaccine in third world countries.

Under the headline “Biden orders exorcism of Trump from White House”, the Mail on Sunday reports that the US President-elect has asked that America’s most famous residence be deep-cleaned, after Donald Trump leaves in January. A spokesman for Joe Biden’s transition team says this is because “Mr Trump’s administration has been riddled with coronavirus”. The source says a team in protective clothing will go as far as replacing door knobs and removing soft furnishings.

The Sunday Express describes the numbers of Christmas shoppers who ventured out on Saturday as “a boost for town centres”. It explains that by midday, cities across the UK had seen an increase of nearly 15% in the number of people shopping — compared to the same period a week earlier. The British Independent Retailers Association is quoted saying the growth is “really encouraging”.

UK and EU agree to keep talking but warn ‘no-deal Brexit’ is now likely

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