Research

“We’ve been living off our past glories and achievements for a while, and slow to adapt to digitalization and AI and even the ‘Green Deal,’” said Sophia Besch, of the Berlin office of the Centre for European Reform.

“It could pull in industry from elsewhere [in the world] — but more likely from elsewhere in the UK,” said Sam Lowe, senior research fellow at the Centre for European Reform, adding: “You can argue it’s good for rebalancing, but only if you assume it comes from London rather than areas that are struggling to get by.”

Sam Lowe, a research fellow at the Centre for European Reform think tank, thinks the two sides will manage to agree a deal this year, but thinks it will, as with the divorce talks, go down to the wire.
"One of the constant threads throughout Brexit was everyone saying "we are happy with severe disruption", but no one really wants it when it approaches," he says.
"In the third quarter the UK will concede in certain areas and the EU will budge a little bit and then Boris Johnson will package it up as a win."
 

Charles Grant, director of the Centre for European Reform, said: “My guess: there will not be a formal extension of the transition à la the withdrawal agreement. But there will be a de facto extension of large parts of the transition because in areas like security, research, education, services, investment, aviation etc there won’t be enough time to do deals this year.” We would have to continue paying into the EU budget over any lengthened transition period but perhaps something can be done.

Trade expert Sam Lowe told City A.M. he welcomed the “sensible approach”.“Focusing on inputs is sensible and nuisance tariffs (below 2.5 per cent) are just irritating,” he said. “The big question for me is how this interacts with the Northern Ireland protocol, where divergence from the EU’s most favoured nation tariff levels makes things slightly more complicated from the rest of the world.”

Agata Gostynksa-Jakubowska, from the Centre for European Reform think-tank, said: “Countries like the Netherlands used to hide behind the UK’s back, hoping it would be very vocal while representing Dutch interests too. “It was better to have another member state threatening a veto.”

As Sam Lowe, a research fellow at the Centre for European Reform think-tank, puts it, “the negotiation will be over preconditions. There will be some tough issues, but there is nothing fundamental in the mandates to stop a deal. If those key issues get resolved, the trade agreement will pretty much write itself.”