Multiple breaking news reports indicate that a deal has now been reached between the United Kingdom and the European Union regarding the UK’s exit from the EU.
After four years of negotiations, the subsequent resignations of two UK Prime Ministers, multiple blown milestones, and a lot of consternation and concerns among multi-industry supply chain management teams, and down to the final wire of uncertainty, this deal has reportedly come to agreement.
In a press briefing held in Brussels, European Commission President Ursula von der Leyen indicated: “It is fair, it is a balanced deal, and it is the right and responsible thing to do for both sides.” She reportedly further indicated that there will be a five-and-a-half-year transition period for the fishing industry in this agreement.
Multiple reports have pointed to stipulations over fishing rights as the final sticking point. Interesting enough, in its reporting, The Wall Street Journal indicated that rules related to the trade of electric batteries also went to the final wire.
The devil is always in the details, and over the coming days the various components to this over 1000-page trade agreement will be made public. The agreement also has to be ratified by both the European and United Kingdom Parliaments. Regarding the latter, given the very late timing, the EU Parliament will reportedly not be able to formally meet, discuss and ratify the treaty for the end of the year that comes in six days. Therefore a form of provisional agreement will be sought. Still unclear at this point is the timing of full ratification by the UK Parliament.
As Supply Chain Matters stated in our last published Brexit update, the initial service disruptions among various ports, air and rail have already occurred. The now verified occurrence of a new, and more virulent strain of the COVID-19 virus has added to the disruption as other EU countries are now restricting travel out of the UK without added virus testing requirements.
We would surmise the combination of both Brexit and coronavirus induced disruption will likely continue for the next several weeks. There simply is not enough time for governments to tend to all of the various details and revised processes related to the new trade agreement. Continued spread of the virus provides a further threat to the logistics and movement of goods. Thus, contingency and back-up plans will remain pertinent regarding the anticipated availability of industry supplies and component inventory. Whether there will be any granting of a grace period related to free trade remains an unknown at this point.
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