The Future of UK-EU Trade Relations: Forecasting the Prospects of a Free Trade Agreement

Introduction

The question of whether a UK-EU Free Trade Agreement (FTA) will materialize remains a topic of considerable debate. Given the intricate relationship between the two entities, it is indeed inevitable that they will forge such an agreement. However, the current progress and political climate make a deal by the end of the transition period unlikely.

The Inevitability of a UK-EU FTA

Given the pre-existing interdependence and the significant economic benefits of such an agreement, it can be confidently stated that a UK-EU FTA is not only inevitable but also desirable. The UK's and the EU's economies are too closely intertwined for a no-deal scenario to be viable in the long term. Any fantasies of a WTO or "Australia deal" kind of arrangement are, to say the least, overly simplistic and delusional.

Based on current developments, my prediction is that a powerful FTA is likely to be agreed upon next year, with the potential for further agreements down the line, such as a Switzerland-style deal, which could include market access and additional benefits such as financial services.

The Current Political Climate and Deal-Making

However, the immediate outlook is less promising. The political climate and the time constraints make it highly unlikely that a deal will be reached before the end of the transition period. While the framework for a deal has been clear for months, the complexity of the negotiations and the numerous veto powers involved make it a challenging task.

Timeline Challenges

Firstly, the deadlines for reaching a deal are continuously shifting. Boris Johnson initially aimed to have a deal by July, September, or October 15, but these deadlines have now passed. The Prime Minister’s recent “we are done” statement further highlights this difficulty. While he could potentially U-turn, the passage of time makes this increasingly unlikely.

Secondly, the rapidly approaching deadline for agreeing, writing, and legally enacting the FTA means that it must be completed by the time the Parliament needs to pass it. There are 29 Parliaments, each with a veto, and this presents a significant obstacle. Historical precedent with the Wallonia veto against the Canada deal demonstrates that such obstacles can be insurmountable.

Political Obstacles

The political climate within the UK is also a major hurdle. Michael Gove, a close ally of Boris Johnson, warned that all options remain on the table, including no deal, which could be detrimental to both parties. While Johnson himself remains ambiguous on his true desires, his colleague described it as the 'Arafat syndrome'—a reluctance to commit to any deal due to the fear that any deal agreed to could be better.

Additionally, Johnson’s associate suggests that the PM is in a state of constant indecision and is worried that any deal he agrees to could be better. Added to this is the political strategy of Johnson to avoid complicity in any deal that may lead to negative press, as he might be blamed for the disruptions caused by a deal.

Conclusion

While the ultimate goal of a comprehensive UK-EU FTA is clear, the current political and logistical challenges make it extraordinarily difficult for a deal to be reached by the end of the transition period. The UK and the EU must navigate these challenges with due care and consideration to secure a beneficial agreement in the future.

As the negotiations continue, it is crucial to remain aware of the complexities involved and the potential for both optimistic and pessimistic outcomes. The path to a prospective FTA is fraught with uncertainties, but the desire for a mutually beneficial agreement remains strong. What remains to be seen is whether the political will and flexibility will outweigh the immediate obstacles in the coming months.