Now We Know How Boris Johnson's Movie
Ends
The Brexit deal makes Johnson the most consequential prime
minister since Thatcher. History will judge him on how he uses his hard-won
freedom.
By Therese Raphael
December 24, 2020, 12:45 PM EST
Therese Raphael is a columnist for Bloomberg Opinion. She
was editorial page editor of the Wall Street Journal Europe.
Now we know how this movie ends. “Brexit means Brexit,” Theresa
May declared in those electric but mystifying opening scenes after the
referendum back in 2016. It wasn’t clear then or for a long while after what
Brexit meant. Nearly five years and two prime ministerial resignations later,
Boris Johnson has finally defined it.
Set against the perils of breaking up with no trade deal, having
an agreement at all merits celebration. Apart from the economic costs and
reputational damage, a no-deal exit would have put terrible strain on the
already fraught union with Scotland and poisoned relations with the European
Union — still Britain’s largest trading partner and the world’s largest single
market.
Relief, expressed repeatedly in the EU’s press conference to
announce the breakthrough on Thursday, is a low bar for a free trade deal. Put
in the context of the last four-plus decades, this is the most regressive trade settlement seen between modern democratic
nations. Instead of enhancing cooperation and lowering barriers, it gums up
most areas where business and consumers transact.
Better Than No Deal
Growth trajectory with a free-trade agreement compared with
other options
It also makes Johnson the most consequential British prime
minister since Margaret Thatcher, acting as a radical rather than a
conservative. He campaigned in Britain’s 2019 general election by promising to
“get Brexit done” in a way that reclaimed “sovereignty” over British laws,
courts, borders and money. He has delivered that control.
It was ultimately a bigger break — or a harder Brexit – than
the one sought by his predecessor May. The U.K. managed to leverage its weaker
negotiating position by threatening to abandon the provisions in last year’s
Withdrawal Agreement to maintain a soft border in Ireland and to walk away over
EU access to U.K. fishing waters. Unlike May’s similar threat to embrace no
deal, the arch-Brexiter Johnson’s warning was credible. And, unlike her, he had
a united, Brexit-supporting cabinet and an 80-seat majority to back it up.
Though only a summary
of the deal has been published, the main contours have been known for
months. The EU has offered — as it did from the start — tariff- and quota-free access for British goods. That’s
significant. Even the EU’s trade deal with Canada doesn’t get rid of all
tariffs on goods trade. But it was not right to claim, as Johnson did initially
in Thursday’s triumphal press conference, that “there will be no non-tariff barriers to trade.”
On the contrary, while one of the biggest euroskeptic
grievances against Brussels was its red tape, Britain had better get used to
quite a lot of extra rules and
regulations. Businesses exporting
across the Channel will need to fill out customs declarations and certify
the origin of their products for export; they’ll have to submit animal products for health checks
and comply with regulations. Companies will have to pay for
certifications in both the U.K. and the EU, increasing the cost of doing
business.
While large companies have been preparing for a while — moving staff to the continent or hiring
customs brokers and third-party consultants to help with
new trade complications — most businesses have made only some preparations.
Many were simply too focused on surviving lockdowns and they lacked the
information to prepare for Brexit anyway. The two sides haven’t agreed on any grace period for companies to adjust.
In exchange for tariff- and quota-free access, the U.K. has agreed not to regress from the
current standards on environmental, labor-market and other areas of the
so-called “level playing field” with
the EU, as well as state aid. If Britain opts to diverge in a way that clearly
impacts trade, tariffs can be imposed, with a new arbitration mechanism,
separate from the European Court of Justice.
London has the option to go its own way but there are
penalties if it hurts EU businesses by doing so. While the City of London’s finance industry has been
insulated from the threat of cross-retaliation (where one sector is penalized
for a breach by another), the EU still has the right to withdraw equal
treatment (equivalency) for Britain’s financiers.
All of this is a long way from Johnson’s original “friends
with benefits” vision of the relationship. “British people will still be able
to go and work in the EU; to live; to travel; to study; to buy homes and to
settle down,” he wrote in his first column for the Telegraph after the Brexit
vote, citing the German business federation, the BDI, in saying “there will
continue to be free trade, and access to the single market.”
For Brits who do want to travel, work, live or study in the EU, there are new hoops
to jump through, all costs that Johnson downplayed in his deal announcement. A
Brexit-weary Britain no doubt hopes to stop talking about the topic entirely,
but there are many ways in which this agreement foreshadows years of negotiations to come.
While the hotly contested area of European access to British
fishing waters was resolved for now with an agreement that sees the EU reduce
its share by 25% over five and a half years, there will be annual negotiations
after that. The deal gives both sides the flexibility to initiate a formal
review of its provisions, an open door that Brexit hardliners in Johnson’s
party will be tempted to push on.
Opposition leader Keir Starmer’s promise to vote for the
treaty, but to “build on” the relationship it establishes in the future
suggests the battle lines over Europe may not so much disappear as be redrawn.
Donald Tusk, the former European Council president, once
lamented that Johnson and his cohort led the campaign to leave the EU without
even a “sketch of a plan” for how to do it. He wasn’t wrong. “You were only
supposed to blow the bloody doors off,” the journalist Sarah Vine told her
husband Michael Gove on the morning after the vote, quoting Michael Caine’s
character in “The Italian Job.”
Instead, the Brexiters took off the roof and the walls too.
But eventually they converged on a plan that accepted the limits of the access
the EU would allow within Britain’s demands for total control. The new agreement sets a floor on EU-U.K.
relations. It will be a long, painstaking process to build a new and properly
robust surrounding structure.
“It’s one thing to get freedom,” Johnson said on Christmas
Eve, “but it’s how we use it, make the most of it; that’s what’s going to
matter now.” That’s also how he will be judged.
This column does not necessarily reflect the opinion of the
editorial board or Bloomberg LP and its owners.
To contact the author of this story:
Therese Raphael at traphael4@bloomberg.net
To contact the editor responsible for this story:
James Boxell at jboxell@bloomberg.net
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