We have a deal!
On Christmas Eve, the United Kingdom announced that it had concluded a trade agreement with the European Union. As this was part of the wider Brexit process, even the announcement was subject to technical difficulties. Evidently, the numbers present in the English language version of the agreement regarding fisheries did not match those in the translated drafts the European Commission had provided to member states. The result was a delay of several hours after the announcement of the agreement from the English side, as the Europeans rushed to reconcile the numbers with the result that Boris Johnson's big press conference with Commission President Ursula von Der Leyen was delayed into the late evening. When it finally took place, both leaders looked as if they had been standing behind the stage for hours and needed a nap. Von Der Leyen had the good sense to keep her comments short, expressing sadness over Brexit, and adding non-committal words to the effect that every ending is a new beginning. Depending on where one stood, those words were alternately a pious hope for a close relationship built upon the foundation of the new agreement, an ominous warning that this process was only beginning with no end in sight, or an invitation to a future British government to return to the European fold. Like her mentor Angela Merkel, Von Der Leyen said little and what she said could mean anything. Nonetheless, the Commission president was a mountain of clarity compared to the British Prime Minister who spared barely a moment to thank his counterpart before declaring the negotiations a triumph for Britain and himself(and implicitly a defeat for his negotiating partners) and challenging the EU to a rivalry to see who could outperform the other. It must have slipped the Prime Minister's mind that the agreement he had just announced included provisions which prohibited the United Kingdom from implementing policies which provided for any competitive advantages over the European Union and allowed the latter to retaliate with a host of measures including tariffs if the UK attempted to. The Prime Minister in effect announced a competition while signing an agreement which prohibited anything of the sort from taking place.
(Note these clauses can be found in the bullet points on the Commission's website.
- Binding enforcement and dispute settlement mechanisms will ensure that rights of businesses, consumers and individuals are respected. This means that businesses in the EU and the UK compete on a level playing field and will avoid either party using its regulatory autonomy to grant unfair subsidies or distort competition.
- Both parties can engage in cross-sector retaliation in case of violations of the agreement. This cross-sector retaliation applies to all areas of the economic partnership.
In fairness to Johnson, the Prime Minister's career has never been about details, and the British approach to the Brexit process has often found details to be inconveniences in the way of the more important abstract rhetorical appeals to sovereignty, identity, and domestic chest beating. The 5600 page agreement was heavy on details. The bullet points might well have ensured the United Kingdom a tariff free trade deal with the European on goods with no requirements to accept freedom of movement or to pay into the European budget, and with no binding enforcement mechanisms for the level playing field provisions. It restored to London full legal sovereignty over fishing throughout the UK's territorial waters. It established independence from European courts, and allowed the UK to set its own regulations.
Yet when it comes to details, all of these nominal triumphs are hedged-in with caveats. While the UK's sovereignty over fisheries is assured in theory, that concession is contingent on the UK waiving the right to do anything with that sovereignty for a period of five and a half years in exchange for the return of 25% of fish caught by European boats. The UK had initially asked for 80% to be returned. Furthermore, while the UK is allowed to resume full sovereignty at the end of that time, any new settlement is subject to agreement by both parties, and if the UK side does chose to limit the rights of European fishing boats, the European Union is allowed to retaliate in other ways, as this would qualify as attempting to "distort competition." In effect, the transition period is not a transition period to full sovereignty, but merely an agreement for the next five years which will then have to be renegotiated with the exact same adversarial process and power imbalances which bedeviled the last four years of talks.
That is probably the best part of the deal for the UK. The free trade in goods does not extend to services. There is no financial passporting allowing financial institutions in London to trade in Euros, and the right to operate will have to be sought state-by-state. There is no equivalency of professional qualifications. If doctors, lawyers, dentists, or accountants wish to practice they will have to apply on a national basis. Even the free trade in goods is hedged by such rules. While the UK is allowed to set its own regulatory standards, exercising the right would in effect void the free trade agreement. The agreement states "UK producers wishing to cater to both EU and UK markets must meet both sets of standards and regulations and fulfil all applicable compliance checks by EU bodies (no equivalence of conformity assessment)" meaning that if the UK lowered its standards to below that of the EU, goods would no longer be able to be sold in Europe unless they met European standards anyway. With such a concession, there was no need for a non-regression clause with regards to standards. The UK would lose the entire trade deal if it exercised the right.
How much of a loss any of these sections are will depend on the future, and it was never clear that the UK ever intended to diverge by lowering standards. But that highlights the major problem with the British approach to the entire negotiating process. Without having ever determined a plan for the UK to win from Brexit economically, the UK was unable to prioritize. As the smaller and weaker party, the UK was always going to come off worse than the European Union, but that did not mean London had no leverage. European countries wanted a deal, and a British government which had a clear vision for what it wanted could have traded off concessions on matters that were unimportant to that vision to secure ones which were. A UK government fully focused on a vision of creating a low regulatory Singapore on the North Sea would have been willing to concede heavily on fisheries, offer to take a hit on goods, and potentially give up Northern Ireland. While the EU would always push for "level playing field provisions" if the UK were willing to give Brussels everything members wanted on fisheries and the Irish border it is plausible they would have let the UK secure full regulatory freedom. In turn, a UK determined to subsidize domestic industries probably could have paid for market access or eaten tariff costs rather than demanding reciprocal free trade. But as British politicians flirted with all of these ideas but committed to none of them they ended up with a deal where they compromised on everything, and without prioritization all of those compromises skewed to a lesser or greater extent in favor of Brussels. Did the UK lose on anything? Not entirely. But the British government's "scorecard" is delusional. On every key issue where the UK secured its nominal objectives, it accepted terms and definitions skewed against London.
"Losing" is a relative term. The European Union never wanted the United Kingdom to collapse, despite quotes from some politicians to the effect that the UK should not be seen to be better off outside of the EU than within. The latter dealt with the benefits of EU membership, namely that the UK should not have a better "deal" than existing members. The UK has one major victory and that is that the Brexit process is mostly done on a political level. There are years if not decades of legal and economic hassles over the terms of this agreement but as a political dividing line it is over. That means that British politics can move on. At the same time, the EU proved its own internal solidity. In 2016 at the time of the Brexit vote Europe was coming off divisions over the Syrian refugee crisis, and faced the challenges of Donald Trump and rising populism at home. There was real doubt as to whether it would survive or face a populist takeover. In 2020 that is no longer a plausible threat. Hungary and Poland pose serious internal challenges, but there are no serious parties which favor leaving the EU in any member state. Far right parties have rushed to disassociate themselves from the British example and stress that they have nothing in common with Nigel Farage. The perception that the EU won has discouraged anyone else from trying it. That was what the EU needed.
The real danger now is not the fallout from Brexit but whether the British elite can decide on a future course for the country. Here, the failures of the Brexit process and the deficiencies of the deal are a symptom not a cause. Brexit was for a large segment of the British population a way to avoid making hard decisions about the future state of the country. Those can no longer be put off.
As an aside I am considering writing a multi-part chronicle of Brexit from a realist perspective. By that I mean one which looks at the options actually available to the actors in British politics and analyzing why they made the decisions they did. I feel this has yet to be examined in any depth. Most coverage of Brexit has focused either on narrative of what happened, or arguments about should have happened, with the latter usually coming in the sub-categories of individuals who think the government should have done what they wanted and individuals who think the government should have been run by themselves. Virtually no effort has been made to separate what various armchair critics would have preferred to have happened from what plausibly could have happened but did not because of actual decisions made by those in power. In particular, there is far too much focus on the behavior, intrigues, and preferences of politicians who never accepted Brexit, believed it was a mistake, and whose only suggested was for others to abandon it. These individuals not only wielded no real power at any point, but provided suggestions which were of no use to those who did. The preferences of Cameron loyalists after 2016, Blairite Labourites after 2017, and the Liberal Democrats at almost all points in the process mattered to no one for the simple reason that they commanded few seats in Parliament, and were nonetheless overrepresented in Westminster compared to the country at large. As such, adopting their policies or allying with them offered only disadvantages for those who might attempt to do so. At the same time, Tory Brexiteers, Corbynites in Labour, and even for a time Theresa May's loyalists retained the option of appealing to the electorate in an election to strengthen their position, whereas any appeal to the electorate could only have served to weaken the Remain elements. That dynamic, not personal intrigues or policy preferences drove British politics. I would like to examine those concepts further in the future.