Britain headed for double whammy of spike in virus cases and no-deal Brexit

ENGLAND'S latest round of lockdown lifting began on the weekend, with the multi-billion-pound hospitality sector re-opening its doors. Yet, amid this mini buzz of excitement, the nation could yet be heading for a "perfect storm" this Autumn - of coronavirus case spikes and a no-deal Brexit.

The growing concern about this double whammy, in a context where the Bank of England says the economy is already in its worst downturn for 300 years, is heaping pressure on UK Prime Minister Boris Johnson to secure a Brexit deal. However, the latest round of EU-UK negotiations broke up on Thursday, a day earlier than planned, with continuing significant differences between the two sides.

With big gaps still between London and Brussels, Mr Johnson is increasingly scaling down expectations of what any Brexit breakthrough could deliver. The limit of his ambitions now appears to be what EU chief negotiator Michel Barnier calls a "bare-bones" trade deal that strips out fundamental areas previously under bilateral discussion.

Take the example here of the proposed future relationship on foreign, security and defence policy, which had been extensively previewed in the UK-EU "political declaration" agreed last year. Mooted then was significant future cooperation, including with the United Kingdom being potentially invited to participate in EU military initiatives, and participating in EU foreign minister meetings.

Yet, the Johnson team has shifted position, significantly, since then even failing to provide negotiating texts in these areas in recent weeks. This has left many across the European Union frustrated, including Mr Barnier, who is aware of the growing potential for UK and EU foreign-policy positions to become misaligned, despite the largely complementary nature of their positions on many key global issues, from climate change to digital taxes, and their posture towards world trouble spots from North Korea to Iran.

Part of the reason for ditching this foreign policy agenda in the negotiations is the Johnson team's decision to prioritise future EU-UK market access and the trade relationship - given the hugely compressed period of time this year to do a deal, made even tighter, time wise, because of the disruption caused by the coronavirus. The EU has never agreed to a trade accord, let alone wider partnership agreement, in such a short interlude.

A LARGER REASON

Yet, there is a deeper, more important reason for London's change of Brexit negotiating strategy - that is, the increasing emphasis it is placing on its so-called "global Britain", with the ambition here to look well beyond the EU, especially on the trade front.

Mr Johnson often highlights that he wants the UK to be a global power, post-Brexit, with one of the largest economies in the world, the second biggest Nato military budget and one of the globe's two biggest financial centres. In this context, he has repeatedly stressed that he wants to re-discover the UK's heritage "as a great global trading nation", not only with key emerging markets like China, India and the Gulf Cooperation Council states in the Middle East, but also with industrial economies like Australia, Canada, Japan and the United States.

London is therefore negotiating post-Brexit UK trade deals with a wide spectrum of countries, and has expressed interest too in joining wider forums like the Comprehensive and Progressive Trans-Pacific Partnership, which is a 11-member trade, and investment club (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam) which the United States may well join too in the 2020s if Joe Biden is elected president in November.

On the face of it, this agenda has much appeal, especially for globally-minded Brexiteers. Yet the devil could well be in the details.

Take the example of China where the UK bilateral relationship has soured badly over a range of issues, including Hong Kong. Agreeing on a favourable trade deal in this context with Beijing will be enormously challenging.

There has been much fanfare too over a potential new UK-US trade deal, which is understandable given that Washington remains one of London's closest allies. Yet, any such agreement will not happen until next year at the earliest, by which time pro-Brexit US President Donald Trump may be out of the White House.

A LONG ROAD AHEAD

There are key areas ripe for agreement in such a US-UK pact, including lowering or eliminating tariffs on goods. Yet, a deal could potentially take years, given a range of potential disagreements, including over standards for agricultural trade and harmonising financial services regulations.

Outside of trade, Mr Johnson has made clear too that, post-Brexit, the UK will continue to play a major role in international security. While London will be an international player through membership of forums such as the United Nation Security Council, what is now less clear is how big its renewed commitment to Europe will be.

To be sure, Mr Johnson has sought to emphasise that while the UK is departing the EU, it is not leaving Europe. And he has previously stressed a desire to continue, if not intensify, cooperation with EU partners in areas including foreign affairs to keep the continent secure, which includes the prospect of UK military personnel remaining for some time in Eastern Europe, given the perceived threat from an emboldened Russia under President Vladimir Putin.

Both Mr Johnson and his predecessor Theresa May had indicated that this potentially extensive web of security and defence relationships would be moulded upon the type of "bold, ambitious free-trade agreement with the EU" with "the freest possible trade on goods and services" that they set out as a key Brexit negotiating objective.

Yet, the prime minister has now rolled back from this.

Importantly, this concerns not just EU leaders in Brussels, but also a wider spectrum of European national leaders too, who had hoped for significant post-Brexit UK security and foreign policy cooperation. Leading powers such as Germany, France and Poland particularly favour a continued strong working relationship, given the growing array of external security challenges facing the union.

This underlines that, while Brexit offers new opportunities for the UK to re-invent its world role, it also throws up uncertainties - and not just for allies. Despite Mr Johnson's bluster, it will not be clear for years how successful this agenda will prove for the nation, especially in a context where UK relationships with China and the US are prone to potentially significant change.