James Rossiter, Senior Global Strategist at TD Securities, points out that the last few weeks have been tumultuous ones for Brexit negotiations as expectations have swung, in the span of just days, from a soft Brexit (in the wake of Chequers) to a hard one (following amendments to the Customs Bill).
“There are two main stages to the Brexit process, and much of the noise in recent weeks has not been about the more pressing first stage.”
“Stage I is the withdrawal (and transition) agreement; Stage II is the trade deal. Stage I is now 80% complete, and the EU is showing surprising flexibility on the remaining 20%, the backstop for the Irish border.”
“We expect this deal to be signed off by year-end.”
“The Chequers proposal focused on Stage II, the trade deal, and for that reason, the EU will not fully engage with it until 2019 and 2020, once the UK has formally left the EU.”
“The UK has attempted to merge the negotiation stages, which has tested the EU’s patience. There remains a wide set of outcomes for the future trade deal.”