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The Brexit deal is about taking back control rather than ‘exact same benefits'

The EU/UK Brexit deal reflects the inevitable consequence of UK priorities running up against EU negotiating strength

Maddy Thimont Jack says the EU/UK Brexit deal reflects the inevitable consequence of UK priorities running up against EU negotiating strength

The UK-EU Trade and Cooperation Agreement was agreed just seven days before the end of the transition period. The treaty, signed on Christmas Eve, has been provisionally applied by the EU – with the European Parliament due to vote on it in the new year – and MPs and peers are expected to approve the necessary domestic legislation tomorrow. That means the UK will now leave the transition period at 11pm on 31 December 2020 with a deal in place.

But the deal does not mean the UK’s relationship with the EU will continue unchanged. It will mean swathes of red tape and additional costs for businesses and hassle for UK citizens going on their holidays to the EU, while the end of freedom of movement means they will no longer be able to move and work freely in the EU.

The deal reflects the UK government’s priorities – sovereignty at the price of friction. But while the big deal or no deal question has finally been answered, this agreement has spawned many more question marks – not least relating to how the agreement will work in practice, and how the UK and the EU’s future relationship will develop in the coming years.

Business will face significant non-tariff barriers to trade with the EU

Boris Johnson made clear his priority was to fulfil the promises made by the Leave campaign, which meant leaving the Single Market and Customs Union and seeking a much looser relationship with the EU than implied by Theresa May’s Chequers proposals.

Even so, many businesses still hoped that the agreement would ease the inevitable introduction of new administrative burdens. But the EU has resisted. There is no blanket mutual recognition of conformity assessments, as the UK sought – which means that many goods will need to be certified by both UK and EU authorities to have access to both markets. There is also no mutual recognition of the sanitary and phytosanitary regime – which means goods of animal and plant origin will be subject to more checks at the border. In some sectors, including pharmaceuticals, automotive, chemicals and organics, there are further facilitations, but for most there will be significant barriers..

Nor does the agreement do much to help the UK services sector. In this respect it falls well short of the UK's asks, with the lack of mutual recognition of professional qualifications – a key UK ask – meaning it will be much more difficult for many professionals to deliver services in the EU, with rules differing member state by member state. There is a framework to agree mutual recognition in the future – but this will need to be built up over time, and the Canadian precedent suggests progress could be slow.

The deal reflects the primacy the government put on sovereignty

Although some will be frustrated at this relatively ‘thin’ deal, the agreement reflects the UK government’s negotiating priorities. The UK negotiating team has successfully negotiated down the obligations the EU was looking to enforce through the level playing field – including continuing to align with certain EU rules from the end of the transition period, seen by many in the Conservative party as an unacceptable afront to UK sovereignty. The agreement, therefore, contains only one mention of the European Court of Justice (regarding participation in EU programmes) – with the ending of its role in the UK a red line for the government from the beginning of the negotiations. Even  so, the agreement doesn’t end the jurisdiction of the ECJ across the whole of the UK – it will still have jurisdiction with regards to the EU rules that will continue to apply to Northern Ireland under the protocol.

While the deal may not protect the economic interests of many businesses trading with the EU, this is an inevitable consequence of the UK’s priorities in the negotiations: sovereignty above all else, and the freedom for the UK to set its own laws and strike its own trade deals.

There are still big questions about how the agreement will work in the long term

This deal will be the foundation of the UK’s relationship with the EU. Rather than put an end to talks with the EU it has created a proliferation of specialised committees and working groups overseeing different elements of the agreement, under the umbrella of a new Joint Partnership Council. There are also new, complex, dispute resolution procedures if either side are seen to breach its obligations – or if the UK or the EU amend their rules relating to the level playing field in a way that leads to “significant divergence” impacting on trade and investment.

While these commitments are reciprocal, in reality it means the UK government will always need to have an eye on what the EU is doing and take into consideration the impact future changes in domestic law – as the UK makes the most of its new-found freedom – might have on the functioning of the agreement. And where the UK is able to diverge on rules governing goods, diverging from the EU also means diverging from Northern Ireland. Additional barriers to trade GB-EU will deepen the border in the Irish Sea. The UK may have ‘taken back control’ but Brussels will still loom large in the corridors of Whitehall.

We do not know how this agreement will end up functioning in practice, but we do know that there will be much more red tape, and much more expense, involved in trading between the UK and the EU – a price Boris Johnson was clearly willing to pay. But while it is already clear that the 'exact same benefits' of EU membership will be lost on January 1, it is now up to the government to show how the UK will gain from a deal which prioritised sovereignty above all else.

Trade Business
Country (international)
European Union
Johnson government
Institute for Government

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