The UK and EU negotiating teams should be congratulated for reaching an agreement – but there is dangerously little time left to scrutinize the deal and to prepare for what it means, says Maddy Thimont Jack
Eleven months after the UK left the EU’s political institutions, and just seven days before the UK is due to leave the transition period, a deal on the future UK-EU relationship has been done.
Businesses across the UK and the EU will welcome the news. Having a deal in place at the end of the year will make a difference, both to the EU/UK trading relationship but also to how the UK and EU law enforcement authorities will be able to work together to keep citizens safe.
But reaching a deal so late in the day brings problems. It leaves very little time for scrutiny and for businesses to digest what the implications are for their operations – and be ready to comply with new rules on New Year's Day.
The UK will leave the EU single market and customs union at the end of the year. There will be a significant increase in red tape and new barriers to trade, but this was always going to be the price of the UK’s desire to be able to strike trade deals with the rest of the world and take back control of its laws.
But the agreement is more than a standard Free Trade Agreement – it also includes chapters on aviation, road haulage, energy and security. Both negotiating teams deserve credit for concluding such a comprehensive agreement in just eleven months.
This has involved compromise. The UK and the EU both wanted a zero-tariff, zero-quota deal – and that has been reached. Further, the UK appears to have been able to reduce some of the EU’s initial offensive demands on the level playing field and fish – although it failed to gain concessions from the EU on services, including the mutual recognition of qualifications. But the deal paves the way for further unilateral decisions from the EU on data adequacy – which will facilitate the flow of personal data from the EU to the UK – and potentially on access for some elements of financial services (although this will not replicate the current arrangements of the EU single market). Neither of those would have been easily achievable with no deal.
A Christmas Eve deal means there is very little time for the public, businesses and parliamentarians to get their heads around the content.
Parliament will be recalled next week and asked to vote on legislation implementing the deal – and MPs and peers will need to rush through legislation so quickly that there is risk of mistakes being made that may cause headaches later.
The European Parliament will have a bit more time – it is not expected to vote until January. Although a decision to provisionally apply the agreement means there won’t be a period of ‘no deal’ at the end of the year, MEPs could still raise questions and concerns once they have had time to look at the detail that may need to be addressed. In reality, however, the European Parliament is unlikely to reject it.
Crucially, however, businesses are not ready – even with this deal now agreed. Adam Marshall, the director general of the British Chambers of Commerce, recently told an IfG event that “clarity, precision and detail” is still missing across a swathe of areas. The government must provide this as soon as the deal is published.
Even so, the complexity of the impending changes – all coming at the same time – means that many businesses could well end up behaving illegally, by accident, if they haven’t understood how the rules have changed. The UK’s approach has been to offer firms a ‘soft landing’ – phasing in import controls at the border and committing to recognise EU regulatory requirements for a period of time. But the EU has been reluctant to reciprocate. Many businesses will hope that, given the timeframes involved, it may be willing to change its mind.
A deal does not rule out disruption, and there will be a tricky period while the two sides adjust to the new relationship. But on both sides of the channel, there will be hope that this deal represents a new, more positive, era in the relationship between the UK and the EU.