UK Lawmakers Scrutinize Brexit Bill as Showdown with EU Looms

After Prime Minister Boris Johnson won the December election in convincing style, it seemed that the headlines early in the New Year might focus on the UK’s departure from the European Union. As things have turned out, there has been plenty of volatility in the markets, but not over Brexit. Rather, the U.S. attack which killed a key Iranian general has shaken the Middle East and caused plenty of worry among investors. Brexit is scheduled to take place in just over three weeks, but this monumental event is playing second fiddle to events in the Persian Gulf.

Brexit has caused plenty of turmoil since the referendum vote in June 2016, and we’re likely to see further drama in the weeks and months ahead. This week, British lawmakers began debate on the Brexit bill, which has been tabled as the Withdrawal Agreement Bill. Parliament must approve the bill, which is widely expected to occur, given that the Conservatives enjoy a comfortable majority. As well, the EU must also approve the deal in the European Parliament.

Both parliaments are expected to easily ratify the deal, but things could then turn nasty. Once Brexit has been approved, there will be a transition period until December 31, 2020. During the transition period, the UK will remain in the single market and customs union. Prime Minister Johnson has said that he will not extend the transition period and that a deal can be reached by the end of the year. However, the Europeans insist that 11 months is not enough time to establish a new trading agreement.

On Wednesday, European Commission President Ursula von der Leyen said that it would be “impossible” to conclude a deal in this timeframe. If both sides remain entrenched in their positions, we could see more of the friction and acrimony which has characterized the relationship between the UK and the EU ever since the UK stunned Europeans by voting to leave the European Union.