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History does not always move forward - Brexit and the possible future relationship between the European Union and the UK

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Thursday 15/11/2018

Brexit is an important event for countries like Belgium which are heavily exposed to the UK’s economy. As talks on a Withdrawal Agreement and a future relationship between the UK Government and the European Commission’s Brexit Task Force are ongoing, this paper provides an assessment of 5 possible scenarios for Brexit: a no-deal leading to ‘cliff-edge’ chaos and a future relationship based on WTO commitments, an extension of the art.50 negotiation period, an extension of the transition period, a comprehensive EU-UK free trade agreement, and the UK’s ‘White Paper’ proposal. We show that for an orderly divorce with continued intense economic relations, one or both parties must move away from their ‘red lines’. The outcome of the negotiations is therefore impossible to predict at the moment, also because sound economic reasoning is falling victim to politics and these are most volatile in the UK. We conclude with an overview of the impact of the Brexit scenarios discussed on parties’ principles.