The United Kingdom and European Union are entering the final leg of negotiations for a post-Brexit trade agreement, with only a few weeks left to approve a potential deal.
The United Kingdom stopped being a member of the European Union in January of this year, but it agreed to keep following European rules until the end of 2020 so both sides could formulate new trade arrangements.
However, reaching a new trade agreement has proven to be difficult task with talks stuck over a number of issues since the spring. Both sides need to reach new trade arrangements and rectify them in their respective Parliaments before the end of the year. Failure to achieve that could lead to a no-deal scenario — higher costs and barriers for exporters on both sides.
The major sticking points remain over fishing, competition policy and governance of any future deal. They have different views on how much access European fishing crews should have to British waters, and on what sort of market competition rules should be applied to ensure Britain’s departure does not jeopardize the European Union’s single market.
Businesses on both sides are waiting for an end to the trade negotiations. The British Chamber of Commerce, a trade body for businesses, warned in late September of "major gaps" in government guidance for firms if no deal is reached.
As a member of the European Union for more than 40 years, many United Kingdom exporters rely on raw materials or clients based in Europe and vice-versa.
Carmakers, for example, are reportedly stockpiling cars and parts to avoid being hit with tariffs in case the United Kingdom and the European Union do not reach an agreement. Brands such as Volkswagen and Honda have large manufacturing plants in the United Kingdom and then export them to the rest of the European market.
