The UK formally left the European Union back in January and negotiators on both sides have until the end of this year to agree a deal on their future relationship. But the outbreak of COVID-19 has slowed negotiations.
The UK also has until the end of this month to request an extension to the transition period - something Prime Minister Boris Johnson has repeatedly ruled out.
As the deadline looms closer, Brexit expert and director of the UK Trade Policy Project, David Henig has outlined the four key reasons a deal could finally be reached.
In a post on the Europe Centre for International Political Economy, Mr Henig says both negotiators on each side have “major differences” in their approach.
But despite the ongoing negotiations, Mr Henig writes how a deal could be reached.
Prime Minister Boris Johnson
Brexit expert David Henig outlines key steps for a deal
He said: “Yet there are also reasons to think a deal could be reached.
“The core of an agreement, goods trade free of tariffs and quotas, is agreed.
“The UK government seems unlikely to carry out its original threat to walk out of talks this month.
“A high-level summit is planned for later in the month at which negotiators seem likely to be tasked with working through the summer to agree on as much as possible.
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UK Brexit negotiator David Frost
“The UK’s document on the implementation of the Northern Ireland protocol was generally seen as a positive step forward in recognising checks would be needed on goods entering the province from Great Britain, even if the detail was frustratingly absent.”
By September or early October, Mr Henig believes both sides will “have much to think about” as they head towards a "major decision point" in terms of “adopting their negotiating positions”.
He goes on to say how it is thought the EU has “less to lose” from a failure to finish a trade deal but claims there will be an “economic hit”.
Mr Henig explained: “The UK is the EU27’s second-largest external trading partner after the US, and losses can be expected in areas like automotive and agriculture as a result of no deal.
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“Access to UK fishing waters is important for some coastal Member States, and the issue of access to UK financial services markets will remain given their current dominance.
“Implementation of the Northern Ireland protocol will be considerably easier with a deal.”
Mr Henig goes on to explain how it will be up to the Prime Minister, Boris Johnson, to ultimately decide whether to leave the EU with or without a deal.
However, he detailed how a ‘no deal’ Brexit could lead to economic risks in a post-COVID-19 world.
The UK officially left the EU in January
He said: “UK business already reeling for the COVID-19 pandemic already expect further costs and disruption, and international investors are increasingly wary.
“It is more likely however that the government will focus on the messaging, thus thinking whether poor economic performance or factories closing will be blamed on no deal or coronavirus.
“The absence of a deal will also make many essential areas of future cooperation more difficult, from customs clearance to visas and security issues.”
EU Brexit negotiator Michel Barnier
This week, the Bank of England governor Andrew Bailey warned banks to prepare for the UK to unshackle itself from the EU without a Brexit trade deal, according to sources.
Mr Johnson has been adamant he will not seek any extension to the current transition period which ends on December 31, despite warnings the coronavirus outbreak means it may be impossible to conclude a new free trade agreement with the EU by then.
He is expected to fly to Brussels to resume Brexit talks with the EU as trade negotiations judder to a halt.