UK-EU ‘historic’ free trade deal marks a new beginning and an end

More than the trade deal, the political implications of a failure to reach an agreement would have been more serious for the UK

Boris Johnson, British Prime Minister, coronavirus, COVID-19
The economy expanded 0.1% in the month, down from 1% in June. Economists had expected gross domestic product to increase by 0.5%

The tortuous tug of war of post-Brexit trade agreement between the UK and the EU has, at last, come to an end with a deal being concluded on December 24.

Prime Minister Boris Johnson and European Commission president Ursula Von Der Leyen made the announcements separately (in London and Brussels) after the negotiating teams concluded the agreement in Brussels.

The negotiations for a free trade deal started after the UK officially left the 27-member club on January 31.

Both the negotiating teams had only 11 months, considered impossible at that time, to conclude an agreement on trade, estimated to be around £668 billion in 2019 figures.

If the trade talks had failed, the UK and EU would have defaulted to the terms of the WTO agreement from January 1, 2021, which would have meant customs and tariff barriers between the UK and the EU.

Also read: UK, EU clinch post-Brexit free trade agreement, hail biggest bilateral deal

More than the trade deal, the political implications of a failure to reach an agreement would have been more serious for the UK. Boris Johnson, in a statement in September last year, said failure to reach a deal would be seen as a ‘failure of statecraft.’

For one, the 2016 Brexit referendum itself was divisive for the country, with Scotland and Northern Ireland voting to remain in the EU but the referendum swung the other way, with the most populous of the four nations comprising the UK voting ‘leave.’

A failure to reach a deal would also have been disastrous for the British economy, already struggling in the backdrop of a ravaging COVID pandemic.

Bilateral trade apart, the single market also meant more in terms of freedom of movement to the people of the EU and the UK. While the trade deal preserves the free-trade benefit, albeit, with some irritants like paperwork, the freedom of movement is largely gone.

Gone are also some benefits to the knowledge economy like the Erasmus student exchange programme.

The deal will have to be ratified by the 27 countries of the EU and the UK parliament in the coming days and weeks. The UK parliament has been convened to meet on December 30 to vote on the deal. With Johnson enjoying a strong majority in the House of Commons and the main opposition, Labour party, reluctantly agreeing to vote for the deal, it is all but certain to be passed.

Compromises and climbdowns

The trade agreement gave both sides reasons to claim victory. Fishing rights were a sticking point in the talks. The EU, with many coastal countries facing the English Channel, wanted access to English waters to continue at the present level. For Britain, it was an equally important political issue, with the potential to enrage the small but vocal fishing community at home. Both seem to have compromised – the EU vessels would have the right to fish in English waters for the next five-and-a-half years, but the quota will be reduced by 25%. For the British side, which demanded a 60% reduction in fishing quotas, this is a climbdown.

Other issues that posed bottlenecks were observing common standards of production and enforcing rules in case of breaches. How these have been thrashed out is not yet clearly known as the 2000-page draft treaty has not been fully made public. The deal is so vast and comprehensive in scope as it deals with a plethora of subjects ranging from civil nuclear cooperation to energy and aviation.

Also read: Brexit done: UK leaves EU as Boris Johnson hails new dawn

The deal, however, does not make bilateral trade completely free of hassles. Though the treaty means there won’t be any tariffs, traders on both sides would still have to use paperwork and that is estimated to cost the British trade quite a tidy sum, besides wasted time.

Scotland’s First Minister Nicola Sturgeon hit the nail on the head at her first reaction to the deal: “there is no deal that will ever make up for what Brexit takes away from us.”

In domestic political terms, Boris Johnson can heave a sigh of relief as the deal is likely to please at least his English Brexiteer supporters. The Brexit was always a sovereignty issue and the ‘leave’ vote was won on symbols of English nationalism.

No wonder, Johnson said while announcing the conclusion of the agreement, “we have taken back control of our laws and our destiny.”

There was, however, regret on the European side that the British decided to leave the union on the political sentiment of sovereignty. “Of course, this whole debate has always been about sovereignty; but we should cut through the soundbites and ask ourselves what sovereignty actually means in the 21st century. For me, it is about being able to seamlessly do work, travel ,study and do business in 27 countries. It is about pooling our strength and speaking together in a world full of great powers,” said Ursula Von der Leyen.

With such divergence in views, no wonder the membership of the EU for the UK has been such a contentious issue domestically in the UK.

The UK also has to negotiate trade deals with other countries in the world – something it was not doing while being part of the EU. The EU has trade deals with some 70 countries; the UK, after leaving the EU, has signed separate deals with 58 countries so far. A free-trade deal with major economic powers like the US and India has eluded Britain so far. It may still be able to reach a deal with them but the fact that the EU free-trade deal is now done and dusted should be a big relief to the UK.

A seething Scotland

The fact that the UK has successfully concluded the historic deal with the EU may not mean an end to its domestic political problems.

Also read: Queen Elizabeth II approves government’s Brexit bill

Scotland has had a troubled relationship with the UK though it voted ‘no’ to independence from the UK in the Scottish independence referendum in 2014.

The Tories have been unpopular in Scotland for a long time. The handling of both Brexit and the pandemic by the Tories has given Nicola Sturgeon an opportunity to rekindle the independence dreams. “People in Scotland voted overwhelmingly to remain in the EU but their views have been ignored,” she said.

Sturgeon said Scotland has the right to choose its own future as an independent country and once more regain the benefits of EU membership. Whether the UK leaving the EU means an end to the Anglo-Scottish union itself is a question that remains to be answered.

Ursula Von Der Leyen aptly summed it up in Brussels when she said, “parting is such sweet, sorrow.” She then went on quote American-British poet, T.S.Eliot: “what we call the beginning is often the end, and to make an end is to make a beginning.”

(The writer is a senior journalist based in London)