© Unsplash/David Dibert

Planned internal market bill of the British government makes Brexit negotiations even more difficult

In view of the insufficient progress in negotiations over Brexit, BDI assumes that the transition phase will end without a follow-up agreement being signed on time. Questions regarding competition rules and fishing rights, among other things, remain open. In addition, a controversial internal market bill by the British government make negotiations more difficult. 

According to experts, the bill is a breach of international law. Boris Johnson has partially undermined the valid, laboriously negotiated deal with the EU so far. Specifically, the law also deals with special rules for Northern Ireland, which are intended to prevent a hard border between the EU and Ireland. At the centre of the dispute is a regulation that allows the British government to unilaterally lift obligations to declare exports. However, this could jeopardize proper customs and tax enforcement throughout the Union.

The EU has made it unmistakably clear that the internal market bill must not violate the international legal agreements in the withdrawal agreement. There can only be a trade agreement with a functioning border regime on the island of Ireland. Anything else would be an attack on the EU internal market. Only with a border regime the internal market will function which is the home market of our industry.

Despite the almost hopeless situation, BDI is in favour of continuing the negotiations. It supports the EU's negotiating line: a future agreement without clear rules for fair competition would be unacceptable. There is little time left because of the deadlines in legislative procedures. Both sides must find a result by the end of October. This will be a challenge as the Johnson administration has damaged its credibility. It risks failure and thus massive damage to companies and their employees at home.

The preparations in German companies have, however, progressed independently of the events. In the BDI Deloitte-Brexit Survey of June 2020, 74 percent said they were well or very well prepared. Nevertheless, difficulties must be expected, e.g. delays at the border. In addition to the negotiations, it is important that the British customs authorities quickly create the necessary infrastructure to process trade at the borders, which will soon have to be cleared through customs in addition, at an appropriate speed.