MEPs will gather in Brussels this afternoon to formally approve the Brexit Withdrawal Agreement, putting the final rubber stamp on the terms of the UK’s departure from the EU. The European Parliament will meet for a special session, and after the speeches to mark the Holocaust 75th remembrance, attention will then turn to Brexit. Guy Verhofstadt, the Parliament’s Brexit coordinator, will begin proceedings, with MEPs voting at around 5pm to approve the Withdrawal Agreement, thus marking the last big parliamentary moment of Brexit, over three and a half years after the original vote. That’s the easy part, then they get down to the nitty-gritty to try to hammer out a deal.
According to Bloomberg, in 2018 the EU exported more than EUR300bn worth of goods to the UK, of which just over EUR47bn could possibly be exposed to tariffs if the UK was to leave the EU without a deal. The report states that the added costs for EU products would run up to nearly EUR5bn. Unsurprisingly the country with the largest exposure to tariffs, at just shy of EUR19bn, is Germany, the vast majority of which are cars. After Germany, Belgium is next up with nearly EUR7.5bn of exports that could be subject to tariffs, followed by Spain, the Netherlands and France.
Of course, when it comes to exports, the EU holds most of the cards. Over the last 5 years, on average, the EU has counted for nearly 50% of all the UK’s exports. More than half of the goods that enter the UK, by value, are from the EU, however for the EU, this was only 5.8% of its total exports in 2018. Moreover, this figure, for the UK, is going in the wrong direction, having been 6.2% on average for the previous 5 years. With the EU having the upper hand in the upcoming negotiations, it looks like Boris Johnson is going to have to play a blinder to get what he wants (or indeed what he has promised). However, Johnson does have an ace up his sleeve; fishing.
The UK has some of the most coveted fishing waters in the world, and without ratifying an agreement on future fishing rights, the EU fishing fleet will lose access to UK waters at the end of this year. The EU has insisted that any move by the UK to limit access to its fishing grounds would be met with an ‘overwhelming response’. This would include the loss of market access to the EU for UK fishermen, and maybe even the complete breakdown of trade negotiations. Indeed, French president, Emmanuel Macron, warned fishing will be treated ‘as an essential economic interest for our country that must be defended’. His position is the same as the whole of the EU, in that ‘existing reciprocal access to fishing waters and resources’ have to be maintained.
So, although Johnson’s ace might be a game-changer, he’s going to have to be very careful how he plays it.