M O R G A N S T A N L E Y R E S E A R C H20 November 2018
Part 1:
Brexit Negotiations, Outcomes
and Impacts
Contents
M O R G A N S T A N L E Y R E S E A R C H20 November 2018
1. Brexit talks: We see a choice between economic and political objectives
Source: Morgan Stanley Research
Politics vs economics: We see a complex choice after the vote to leave between the economics, which would tend to
favour minimal change to current trading arrangements, and the politics, which would tend to imply more fundamental
changes to current trading arrangements. On the EU side, we think the key concern is to avoid a deal that might encourage
others to follow the UK precedent.
M O R G A N S T A N L E Y R E S E A R C H20 November 2018
1. Brexit talks timeline: We see the key moment of risk at the end of 2018
Source: Morgan Stanley Research
We see key risk moments at the end of each phase of the talks. The first in late 2017 was the key risk moment for the preliminary deal on
the exit issues. We expect the second in late 2018 to be the key risk moment for the whole Brexit process, and to cover a package deal,
consisting of the final withdrawal agreement, including the deal on transition, and a political declaration on the principles of the future EU-UK
trade relationship and partnership. We expect the third moment in early 2020, although we see a risk it could slip given the tight timetable to
be the final agreement on the future UK-EU trade regime and partnership arrangements.。