So here we are. More than 3.5 years after the referendum the UK finally leaves the EU. The cliff-edge of a no-deal Brexit has been avoided, to be replaced with the fear of a no-trade deal cliff-edge at the end of 2020 when the transition period ends.
Before leaving, the public was again exposed to the rather confused approach of the UK to the EU and Brexit. A few days ago, even the Brexit MEPs noticed that
Brexit implies loss of influence in Brussels. And last weekend the FT exposed us to the confusion that many British intellectuals have about the EU and the role
of the UK in Europe as well the Little England philosophy. And while the EU has clearly set out its negotiation strategy, the UK government keeps sending confusing signals (one day it is complete divergence in regulatory standards, the next day no divergence
at any price). If this looks like deja-vu from the withdrawal treaty negotiations, then yes, welcome to the next season of the Brexit soap opera.
As Tony Connelly
pointed out, the negotiations will not result in a Canada plus/minus agreement, but rather in a Swiss-type approach, especially given the time pressure, a patchwork of different agreements, with permanent negotiations for the next decade. So, the
end of the transition period will be dominated by Swiss cheese – a new framework of EU-UK relationships with lots of holes. In addition to negotiations on the future relationship between the UK and the EU, the practical arrangements for the customs border
between Great Britain and Northern Ireland will offer ample space for conflicts in the future. And the more the UK diverges from the EU, the harder the Irish Sea customs border turns.
Boris Johnson has declared that Brexit is done and
that the word is not to be used after 11 pm tonight. Some observers predict that trade negotiations are technical so will not attract headlines. But how will he (and government, Tories, Brexit media etc.) refer to the negotiations with the EU, especially once
they turn nasty and affect the future of manufacturing companies in the UK? What about the future of the fishery industry? Will they claim that the EU is taking revenge against the “independent UK” after Brexit by not allowing the UK to have its
cake and eat it? Will they blame again the civil servants for caving in? And what if the dream of a US and an EU trade agreement before the end of the year is not achieved? It will be hard to disentangle the next phase from the previous one, even in the mind
of the most-convinced Brexit voters.
There is more and more evidence on the high price that the UK has already paid for Brexit over the past year, with the weekly bill now even exceeding the fake 350 millions Brexiters claimed the UK pays
to the EU every week. There are now clear indications that the manufacturing sector will decline if the Johnson government follows its approach of divergence from the EU (and even under a zero-tariffs, zero quota regime). But will Brexiters ever acknowledge
that there were wrong in their predictions? Certainly not; it will always be someone else’s fault. And assuming there will be no cliff-edge at the end of the transition period (either because it gets extended or there will be a bare-bone agreement
in place with lots of additional temporary measures unilaterally introduced by the EU), the decline will be a slow one. In addition, the economic predictions of lower growth and GDP loss are under ceteris paribus assumptions (with lots of other things moving,
e.g., increasing government deficits to cushion any economic hit), so simple comparisons undertaken in ten years might not give necessarily the same picture as a hypothetical counterfactual of the UK having stayed in the EU.
those who hope that the UK will rejoin the EU quickly. I think this is a rather naïve hope. It would require a much broader political and societal consensus than 52-48 to do so and the UK is far away from that. And there is the “minor”
issue that leavers and remainers keep forgetting – joining the EU is based on negotiations between the UK and the EU! The best that remainers (after 11 pm aka rejoiners) can hope for and should work towards is a closer alignment of the UK with
the EU in the future, the Norway model, which in turn might eventually lead to a rejoining in the second half of this century.
Today is a sad day. Brexit makes the UK poorer and the EU smaller and possibly weaker. Unfortunately,
it is not the end of a sad story, but just the beginning of what will be a fraught cross-channel relationship, with lots of potential for future conflicts.