Did the Brexit deal fulfill Boris Johnson's political agenda?

January 26, 2021 11:00 AM
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Leon Neal/Pool via REUTERS

For backers of the British exit from the European Union, the overriding political objective was to reestablish UK “sovereignty” over its own affairs, particularly in supposedly onerous regulations from Brussels along with the writ of the much-reviled European Court of Justice. As previously discussed, the Brexit deal at the end of 2020, known as the EU-UK Trade and Cooperation Agreement (TCA), may have at least symbolically delivered something resembling that goal but at the cost of lost economic growth and efficiency and restricted immigration and mobility of UK citizens to continental Europe.

But did Prime Minister Boris Johnson win a political victory in the deal? The answer is complicated. TCA was only agreed literally during the last week of 2020, and it went into effect on January 1, 2021. The transition to the accord’s new trade regulations has been abrupt and economically damaging, as EU and UK businesses have had no time to prepare. Modern trade deals among advanced economies, such as the United States-Mexico-Canada Agreement (USMCA), always leave months if not years for businesses and regulators to properly prepare.

Arguably a deal like the TCA can come together only at the last moment, due to the need for sufficient political pressures in favor of any deal to build up first. But it is unclear what Johnson gained from the procrastination at the negotiating table, after winning his large parliamentary majority in early 2020.

Because it was negotiated at the last minute, Johnson did get to portray his skinny deal as a great victory, simply because it avoided the worst possible outcome of “no deal,” which many were resigned to by mid-December. Perhaps more important, he ensured that the 1,200+ pages—probably the most important trade deal the UK will ever sign—would be rushed through the UK Parliament in a matter of a few hours with scant political oversight or democratic contemplation by the members of parliament. Johnson thus avoided tough political questions about the many controversial provisions he had accepted. More ominously, the TCA’s governance empowers joint committees of the European Commission and UK government to ensure that the deal works, effectively eliminating day-to-day UK parliamentary oversight of its implementation.

Scheduled TCA reviews may become political weapons

The agreement’s general review clause is scheduled for every five years, like the USMCA’s six-yearly review clause. Thus the TCA’s review would come no later than 2025, after which it can be extended, renegotiated, or wholly or partially terminated. Given that the TCA does not cover many parts of the EU and UK economies, including services sectors and data-driven commerce, the future could portend endless “Brexit negotiations.”

It is surely no coincidence that the timing of five-year TCA reviews corresponds with the UK electoral calendar calling for the next general election to be held in 2024. The outlandish claims by advocates of Brexit, especially Johnson, raise the likelihood of him trying to make Brexit an election issue in 2024. He could claim that a vote for the opposition Labour Party ahead of the 2025 TCA review would effectively be the equivalent of surrendering to the EU and calling for de facto rejoining it. Continuing such a divisive Brexit debate for short-term partisan gain will not strengthen national cohesion in the UK.

Brexit and TCA undermine UK regional power sharing and devolution, perhaps intentionally

The TCA was rushed through Westminster with an undemocratically short parliamentary review at the end of 2020. Yet, at least Westminster had a voice, something the UK’s regional parliaments in Scotland, Wales, and Northern Ireland were not given. Because the TCA and related Brexit legislation touch upon many powers devolved to the regional parliaments, the TCA (and Brexit in general) centralizes power grab with the UK government. If Brexit turns out to be an economic disappointment—which appears quite possible—support for the integrity of the UK, especially in Scotland, could easily further erode.

The TCA ties Northern Ireland’s economy to the rest of Ireland

The TCA only implicitly covers governance of the Northern Irish border, which was previously agreed upon as part of the Brexit withdrawal agreement in 2019. The withdrawal agreement stipulated that regulatory and customs checks for Northern Ireland should largely take place in the Irish Sea between Northern Ireland and the rest of Great Britain. Northern Ireland itself would remain part of the EU’s internal market and de facto inside the EU customs union. This arrangement itself raises significant issues for the UK. The agreement requires substantial administrative procedures over trade between Northern Ireland and the rest of the UK. Thus Northern Ireland is a de facto rule-taker of EU rules. Prime Minister Johnson readily accepted this dismemberment of the UK’s economic and regulatory cohesion in late 2019 as the withdrawal agreement was being negotiated.

But several provisions in the TCA will now accelerate Northern Ireland’s reorientation of its economic ties and supply chains away from Britain and toward the Republic of Ireland. The core reason is the same increase in the post-TCA administrative burden affecting the rest of UK trade with the EU, especially the lack of agreements on mutual recognition of regulations in the TCA for various testing procedures to guarantee safety of plant and animal products. Once the phase-in period is over in up to six months, almost all of Northern Irish nonlocally sourced food will likely come in from Ireland, rather than the UK. The same will be true in virtually all other sectors reliant on deep supply chains.

This supply chain reorientation will have major political repercussions, accelerating the likelihood of an approval of eventual Irish reunification, something that must be voted on as stipulated by the Good Friday Agreement of 1998. Arguably, Johnson wrote off Northern Ireland when he signed the withdrawal agreement in 2020, but Irish reunification will nonetheless be a bitter political pill for his party to swallow if or when it arrives.

Johnson hardly “got Brexit done”

The TCA is a largely backward-looking deal. It covers such a small part of the total EU and UK economies in detail that it guarantees perpetual trade negotiations between the two parties. The TCA will also potentially greatly constrain UK regulatory authorities from diverging from EU rules, to avoid the risk of EU trade retaliation against social protection regulations that happen to be politically appealing among Conservative Party members. The TCA, which only mitigates the worst economic damage of Brexit, ultimately could undermine whatever political rationale for Brexit the Conservative Party has left.

This, combined with the risks the TCA also poses to UK territorial integrity and the agreed regular five-year reviews, makes the TCA a fundamentally unstable economic agreement. It is, therefore, likely in the medium term either to be scrapped partially or completely or to pave the way for a much closer Norway-like economic relationship between the EU and UK. The TCA hardly fulfills Johnson’s promise to “get Brexit done.”

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Jacob Funk Kirkegaard Senior Research Staff

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