Boris Johnson’s Brexit Deal
October 18, 2019
White smoke drifted over the European Commission building in Brussels on October 17th: there is a new agreement between the United Kingdom and the European Union. But what’s in it?
Boris Johnson negotiated this deal in 15 days. His Brexit deal is based very much on his predecessor, Theresa May’s Withdrawal Agreement. If the British and European Parliament approve, the new deal means the UK will leave the EU on October 31st with a transition period until December 2020: fourteen months to negotiate a Free Trade Agreement between the UK and EU. It is hoped that this future agreement will be a ‘zero tariff, no quota’ trade deal.
Johnson’s Brexit deal is very different from Theresa May’s however. There will be a customs and regulatory border in the Irish Sea and this deal won’t be as closely as aligned with the EU, but this is because Boris Johnson is very eager for the UK to negotiate as many free trade agreements as possible. This brings new opportunities – the UK might forge ahead with a Free Trade Deal with the US, for instance. But at the same time, the UK government has committed to maintaining a “level playing field” with Europe on climate and environment issues, and worker’s rights. It is not clear that the UK will be able to offer many concessions to future trade partners.
Northern Ireland and the land border with Ireland has been at the center of the most heated disputes. With the new deal, the need for customs checks on the Irish border has been solved by placing these checks in ports on the Irish Sea. In effect, Northern Ireland’s links with their southern neighbor have endured while their connection with the rest of the United Kingdom has been weakened – which is why the Democratic Unionist Party (DUP) has announced they are against the deal.
As with all Brexit deals, this one will likely leave the UK economically worse off than staying in the EU. Whereas Theresa May’s deal would have reduced GDP by only 2.1%, Johnson’s deal is calculated to cost 6.7% of GDP (the offset brought about by new trade deals is negligible, about 0.1%). This compares with the worst case ‘No Deal’ option, calculated at 9.3%. Furthermore, Boris Johnson’s Brexit reduces the opportunities for UK citizens to travel, work, and study in Europe, and will reduce both the UK and the EU on the world stage.
The details of the new Brexit deal are still being examined and digested. All eyes now turn to the House of Commons for an uncommonly timed sitting on Saturday, October 19th where Members of Parliament will vote on this new deal. Some political watchers believe the vote could by extremely close – one or two votes either for or against.