On Monday afternoon, David Davis of the UK and Michel Barnier of the EU revealed that their governments had agreed on the shape of their relationship during the first two years after Brexit. Here’s what it will look like:
A 21-month transition period: The UK will officially leave the European Union on March 29, 2019. Monday’s announcement adds a 21-month transition period, which will end on December 31, 2020. During this phase, the UK will enjoy all “the benefits, the advantages of the single market and the customs union,” Barnier said at today’s joint press conference in Brussels. The UK hoped for a full two years, but Davis deemed the agreed time limit “close enough.” Businesses had hoped for a period of stability to adjust to a post-Brexit business environment, and the government wanted more time to negotiate a final agreement with the EU. Adam Marshall of the British Chambers of Commerce called the agreement “a milestone that many businesses across the UK have been waiting for.”
The UK will accept EU decisions with no input: In that 21-month period, the UK will be a rule taker, not a rule maker. The UK agrees to “be bound by the obligations stemming from” international agreements the EU signs, but it will have no role in making those decisions.
Following EU regulations costs the British economy an estimated £120 billion ($ U.S.) a year, according to Economists for Free Trade. “In contrast, if Britain seizes the freedom to move away from EU regulations,” said the group’s chairman, Patrick Minford, GDP would grow “by two percent.”
New trade deals: In the transition phase, the UK may negotiate and sign new free trade deals – but may not implement them. Davis said, “The United Kingdom will be able to step out, sign and ratify new trade deals with old friends — and new allies — around the globe for the first time in more than 40 years. These will come into force when the implementation period is over, providing new opportunities for businesses across the United Kingdom and seizing one of Brexit’s greatest opportunities.” International Trade Minister Liam Fox had vowed to have “around 40” new trade agreements in place by the date of Brexit.
Migration: All EU migrants who arrive in the UK during the transition period will have the right to settle there permanently. Theresa May had said during her visit to China that she would not accept such an arrangement; however, the Home Office signaled it would capitulate to the EU last month.
The Irish border: Ireland presents a unique problem. Northern Ireland is part of the UK, while the Republic of Ireland will remain a member of the EU. Brussels has said Northern Ireland must maintain all EU regulations or risk creating a “hard border” between the recently reconciled nations.
On Monday, Barnier stated that the transition agreement includes a “backstop” provision – known as “Option C” – which sees Northern Ireland “maintaining full alignment” with EU regulations, in perpetuity.
Prime Minister Theresa May had previously rejected this proposal, saying it would “undermine the UK common market and threaten the constitutional integrity of the UK by creating a customs and regulatory border down the Irish Sea – and no UK prime minster could ever agree to it.” Others members of her governing coalition agreed. “We did not leave the European Union to oversee the breakup of the United Kingdom,” said Nigel Dodds, who leads the DUP’s delegation in Westminster. As recently as February 28, DUP leader Arlene Foster tweeted:
EU draft text is constitutionally unacceptable & would be economically catastrophic for Northern Ireland. I welcome the Prime Minister's commitment that HMG will not allow any new border in the Irish Sea. Northern Ireland must have unfettered access to GB market. AF
— Arlene Foster (@DUPleader) February 28, 2018
Opponents have argued that technology could obviate the need for customs checks at the island’s 200 crossing points.
Davis said today that he hopes the EU and UK will “achieve a partnership that is so close as to not require specific measures in relation to Northern Ireland.” But, he admitted, “There is as yet no agreement on the right operational approach.”
"Option C" remains in the negotiation text but is apparently rejected by Westminster.
Fisheries: The EU Common Fisheries Policy (CFP) allows fishermen from EU countries to catch a predetermined quota of fish in British territorial waters. A total of 88 percent of adult North Sea herring, Europe’s most popular fish, resides in UK waters – and recovering sovereignty over its own seas would be a boon to the British fishing industry.
The agreement extends the CFP until the end of 2020. However, after Brexit the EU has to consult UK before negotiations on fisheries, and “the United Kingdom’s share of the total catch cannot be changed.”
The Scottish Fishermen’s Federation declared flatly, “Our government has let us down.” MP Ruth Davidson, the leader of the resurgent Conservative Party in Scotland, wrote on Facebook, “I will not support a deal as we leave the EU which, over the long-term, fails to deliver that full control over fish stocks and vessel access.”
Financial settlement: Barnier announced the two sides had “complete agreement” on the UK’s financial settlement. London will pay Brussels a £37.1 billion ($52 million U.S.) “divorce bill” via installments until 2064, the Office for Budget Responsibility (OBR) announced last December.
Nothing is final: This agreement applies only to the transition period, ending on New Year’s Day 2021. It has nothing little to say about the relationship the two governments will have post-Brexit. It excludes such issues as: UK access to the customs union, regulatory alignment, jurisdiction of the European Court of Justice inside the UK, and any access London’s powerful financial services industry will have to the EU. Barnier said that negotiations over their final relationship can begin now but cannot be finalized until after Brexit, when UK is an external or “third country.”
Furthermore, the two parties do not agree on all of the transition agreement. Mutually accepted portions of the agreement, highlighted in green, come to approximately 75 percent of the agreement text. However, as noted above, significant challenges remain.
“We are not at the end of the road, and there is a lot of work still to be done,” Barnier said. “Nothing is final until everything is final.”
Christians should care about Brexit negotiations, which could allow more robust global trade, enable developing nations to produce value-added products and industries to further reduce poverty, and allow the generally free-market UK to abide by the principle of subsidiarity currently denied by its membership in the ever-expanding EU superstate.
(Photo credit: Toms Norde, Valst Kanceleja. This photo has been cropped. CC BY-SA 2.0.)