What Brexit Will Mean, Deal or No Deal
By Katie Dailey ‘24
On June 23, 2016, the United Kingdom voted on a referendum to begin the process of leaving the European Union. After years of tense negotiations which resulted in the election of a new Prime Minister, Boris Johnson, the second PM since 2016 after the resignation of David Cameron and Theresa May, the UK officially left the EU on January 31, 2020, with a transition period for a deal to be created through December 31, 2020. As that date approaches, however, the likelihood of a “no-deal Brexit” is constantly increasing, and leaders of both the UK and the EU are preparing for such an unwanted situation.
One piece of particular contention comes with the Internal Market Bill, a piece of legislation currently in debate in the House of Lords, the second house of Parliament made up of appointed and hereditary peers, after passing the House of Commons, the primary house of the UK Parliament that is popularly elected. The bill would create, as the name suggests, an internal market between England, Scotland, Wales, and Northern Ireland to replace the European single market, which has a series of regulations and trade standards agreed upon by the European Union in Brussels.
This legislation is unpopular with a number of groups amongst British political leadership. 395 of 564 peers in Britain’s House of Lords voted to amend the bill, expressing “regret” for the bill’s actions, which they feel is skirting fundamental principles of rule of law in Britain. One peer, David Anderson, stated, “This bill seeks to make Parliament complicit in a scheme that openly flouts two foundational principles — that agreements once made should be kept and that government is not above the law.” Similarly, the top archbishops of all four regions of the UK published a letter condemning the bill’s actions on the grounds of its moral, legal, and political consequences in the field of international law, as this bill would be a violation of the legal terms of the Brexit agreement regarding the Northern Irish border. Not only would this pose a legal challenge, but it would disrupt the trust between the UK and EU in negotiations, potentially leading to political fallout.
This bill has caused internal tension between the four countries, with many worried that the standards set across the UK would drag down quality control on many products by pulling standards down to the lowest common denominator within the UK. It has created a regional dispute, especially between England and Scotland in terms of which government would be controlling these standards across the regions. This exacerbates an already-existing tension between England and Scotland, as the numbers of Scots supporting an independence movement increases. A poll taken on October 14 by IPSOS showed that 58% of Scots would vote “Yes” on an independence referendum, the highest level ever recorded according to Politico. If policy differences, including the Internal Markets Bill, cannot be resolved before the transition period of Brexit expires, a Scottish independence referendum might be called, as was done in 2014, a demonstration of the increasing disunity in the UK that is exacerbated by the Brexit debate.
Senior officials from both the UK and the EU are preparing for a no-deal Brexit at the end of 2020, especially following the comments from a spokesperson for UK Prime Minister Boris Johnson that stated that trade talks were completed, unless the EU changed its stance on certain issues. This is not a given, as senior UK official Michael Gove stated that the door is “still ajar” for trade talks, but he also maintained that the EU would have to make concessions on key issues.
A no-deal Brexit would mean that the UK government would have to create its own trade deals globally, which it has already begun to do. On October 23, Japan and Britain signed a free-trade agreement, which is beneficial to the British economy in terms of major imports and exports. Britain’s biggest export to Japan is currently financial services, but also includes a number of other goods, such as pharmaceuticals and food products. Britain’s main imports from Japan are auto parts and machinery. This free trade agreement, though helpful, would not solve all of the financial problems that Britain will face after the transition period ends if a deal is not reached in the next two months. The current opposition party, the Labour Party, estimates that this single deal will increase GDP by 0.7%, while the fall to the GDP is estimated to be at least 3.1%.
While the EU will be affected by this deal as well, it will not be nearly as hard-hit as Britain. The impact on its GDP will likely only be approximately a 0.7% decrease. In terms of political effects, according to a study done by the Rand Corporation, the EU’s main interest in Brexit should be preventing the future withdrawal of other states, in order to keep the EU together in the long-term future.
The border between Northern Ireland and the Republic of Ireland, which is still a part of the EU, has been a source of tension in Brexit negotiations, as the border prior to Brexit was completely soft. This is key for many people, as travel between the two is commonplace for many people. To solve this problem, the UK created a Northern Ireland Protocol, which will create a different set of customs rules in Northern Ireland than in the rest of the UK. Northern Ireland will continue to use the customs rules and product standards in place under the EU, which will make border checks between Northern Ireland and the Republic of Ireland unnecessary. This will mean, however, that certain goods entering Northern Ireland from the rest of the UK will be subject to checks at what will become a loose customs border in the Irish Sea. This protocol was key, however, to avoid a return to the instability that the island of Ireland faced throughout the 20th century.
There is little argument to be made that the UK’s exit from the EU is not going to have long-term effects on the political, social, and economic landscape of both Britain and Europe as a whole for years, if not decades, to come.