Brexit Is Finally Done, but It Already Seems Out
of Date
The idea of an agile “Global Britain” was an effective
sales pitch. But that was before President Trump and other populists began
erecting barriers to trade.
Mark
Landler
By Mark
Landler
Dec. 24,
2020
Updated
3:28 p.m. ET
https://www.nytimes.com/2020/12/24/world/europe/brexit-deal-boris-johnson.html
LONDON — It
took 11 grueling months for negotiators from Britain and the European Union to
hammer out the terms of a post-Brexit trade deal. But in many respects, the
deal is already four and a half years out of date.
The world
has changed radically since June 2016, when a narrow majority of people in
Britain voted to leave the European Union, tempted by an argument that the
country would prosper by throwing off the bureaucratic shackles of Brussels.
In those
days, the vision of an agile, independent Britain — free to develop profitable,
next-generation industries like artificial intelligence and cut its own trade
deals with the United States, China and others — was an alluring sales pitch.
The buccaneers of Brexit promised to create a “Global Britain.”
That was
before the anti-immigrant and anti-globalist-fueled rise of President Trump and
other populist leaders who erected barriers to trade and immigration and
countries turned inward. It was before the coronavirus pandemic exposed the
vulnerabilities of far-flung supply chains, fueling calls to bring strategic
industries back home and throwing globalism into retreat.
In the
anxious dawn of 2021, buccaneers are out of fashion. The world is now dominated
by three gargantuan economic blocs — the United States, China and the European
Union. Britain has finalized its divorce from one of them, leaving it isolated
at a time when the path forward seems more perilous than it once did.
“The whole
‘Global Britain’ model doesn’t reflect the more protectionist, nationalistic
world we’re living in,” said Thomas Wright, the director of the Center on the
United States and Europe at the Brookings Institution. “Being a global free
trader in 2021 is a bit like turning into a communist in 1989.”
As Prime
Minister Boris Johnson leads Britain into a post-Brexit future, he also risks
being out of step politically.
The Brexit
agreement with the European Union comes at the very moment that President-elect
Joseph R. Biden Jr. is replacing Mr. Trump’s “America First” credo with a
message of mending alliances and collaborating to tackle issues like global
health and climate change.
While the
deal averts tariffs and quotas on goods crossing the English Channel, it is at
heart about disentangling neighbors who had become deeply integrated over four
decades. That estrangement, analysts say, is bound to weaken ties between the
two sides in other areas, like security and diplomacy.
“Biden
wants to see alliances and multilateralism and cooperation, and Brexit runs
completely against that,” said Mujtaba Rahman, an analyst at the Eurasia Group,
a political risk consultancy. “Brexit is graduating into a more difficult
political context where it is running against the grain.”
Mr. Trump
cheered Britain’s drive to sever itself from the European Union. As a reward,
he promised to negotiate a trade agreement with Mr. Johnson, whom he cultivated
personally. But Mr. Biden opposed Brexit and has ruled out negotiating new
trade agreements until the United States improves its own competitive position.
That nullifies one of the prime selling points of Brexit.
Mr. Johnson
has pivoted by highlighting other ways that Britain can work with the United
States. It is increasing military spending to reinforce NATO and playing host
at a United Nations’ climate summit next year, which will give Mr. Biden a
platform to re-engage the United States in the climate challenge.
Britain has
also promoted itself as a champion of democratic values in places like Hong
Kong, standing alongside the United States. But in a less hospitable world, it
may not find many allies for that kind of work.
“Who are
the obvious partners for them?” Mr. Wright said. “Four years ago, they could
have said Brazil, but Brazil is now run by Bolsonaro,” he added, referring to
the populist president, Jair Bolsonaro.
There are
also limits to how muscular a partner Britain can be in the confrontation with
autocratic states like China and Russia. Its changing relationship with China
illustrates its diminished stature.
Britain
once hoped its free-agent status would allow it to develop a thriving
commercial relationship with Beijing, unencumbered by the baggage of the
European Union or the United States. But under pressure from Mr. Trump on the
role of the Chinese telecommunications giant Huawei in 5G networks, Britain has
largely abandoned its cultivation of China, falling in line with the United
States’ more antagonistic position.
The
European Union, by contrast, has continued to negotiate a landmark investment
treaty with China, a goal of the Germans, who want greater control over the
Chinese operations of their companies. Last-minute objections raised by aides
to Mr. Biden are giving the Europeans second thoughts, but Germany’s drive to
finish the deal before the end of the year attests to its more confident
position.
In 2016,
Brexit was embraced by three distinct factions in British politics, said
Matthias Matthijs, a professor of international political economy at Johns Hopkins
University: right-wing anti-immigration figures like Nigel Farage; orthodox
free traders in the Conservative Party; and some on the left, who hoped the
move would free up money to subsidize factory jobs in the country’s industrial
north and, in any event, regarded the European Union as a bankers’ club that
Britain was well out of.
“It’s not
clear that signing this E.U. trade deal will give them more freedom to do
that,” Mr. Matthijs said of the subsidies, noting that Britain had agreed to
abide by constraints on how much state aid it can dole out to industry.
The
paradox, he said, is that Britain is casting off from the European Union at a
time when its two largest economies, Germany and France, are embracing some of
the tenets of industrial policy that inspired Brexit.
The
pandemic has forced Brussels to reconsider policies it once shunned — initially
in the form of a $2.8 trillion coronavirus rescue package — that bring it
closer to the ideas pushed by Brexiteers, like Mr. Johnson’s former chief
adviser, Dominic Cummings. He was an architect of a plan to use public money to
“level up” Britain’s economically disadvantaged north with its more prosperous
south.
Liberating
itself from the constraints of Brussels had been one of the biggest attractions
of Brexit. Instead, Britain faces a much larger competitor that seems bent,
like Britain itself, on transforming its economies with digital and “green”
technology — and more open to using state aid to do so.
Another
irony of Brexit is that Europe, alienated by the unilateral policies of Mr.
Trump, has begun echoing some of the language used by Brexiteers in 2016.
President Emmanuel Macron of France and others have spoken of the need for
“European sovereignty” in the face of a less reliable United States. Mr.
Johnson made reclaiming British sovereignty the leitmotif of his negotiations
with Brussels.
Britain
still has indisputable advantages as it charts a new course. Despite being
devastated by the pandemic, its economy is flexible and resilient, at least
relative to those on the European continent. It was the first Western country
to approve a virus vaccine, while the European Union has been bogged down by
the need for its members to move together.
Mr.
Matthijs predicted that Britain’s economy would snap back faster after the
pandemic than those of Germany or France, which he said the Brexiteers would
attribute to the freedom gained by shaking loose of Brussels.
Britain’s
independence also affords it the chance to be experimental in its relations
with other countries. Mr. Wright, for example, said the Biden administration
might be interested in negotiating a different kind of economic understanding
with Britain than an old-fashioned free trade agreement.
“They’re
well positioned to be the guinea pig for this,” he said.
Britain,
after all, just negotiated a deal unique in the annals of trade diplomacy — one
that separates, rather than brings together, partners. Its ability to get that
done, analysts said, is a hopeful sign for its ability to reshape itself yet
again.
Nevertheless,
“the world of June 2016 is not the world of today,” Mr. Wright said. “They know
that as well, deep down.”
Mark
Landler is the London bureau chief. In 27 years at The Times, he has been
bureau chief in Hong Kong and Frankfurt, White House correspondent, diplomatic
correspondent, European economic correspondent, and a business reporter in New
York. @MarkLandler
For the European Union, It’s a Pretty Good Deal
The Brexit pact preserves crucial E.U. principles like
the single market, and lets the bloc look ahead to its future without Britain.
Steven Erlanger
By Steven Erlanger
Dec. 24, 2020
Updated
1:30 p.m. ET
BRUSSELS — The
European Union emerges from fraught negotiations with Britain over its exit
from the bloc with a sense of satisfaction — that it has maintained its unity
and its core principles, especially the integrity of the single market of now
450 million consumers that is the foundation of its influence.
And it is
now looking ahead to its life without Britain.
Ursula von
der Leyen, the trilingual German who is the head of the European Commission,
the bloc’s powerful bureaucracy, emerged from the wrangling with her political
profile and reputation enhanced.
Normally at
the end of a negotiation she felt joy, Ms. von der Leyen said on Thursday
evening. But today, she said, “I only feel quiet satisfaction and, frankly
speaking, relief.”
It was time
“to look to the future,’’ she said. “It is time to leave Brexit behind. Our
future is made in Europe.”
It has been
a satisfying end to a difficult year for Ms. von der Leyen and the European
Union as a whole. The bloc was buffeted by serious challenges ranging from the
pandemic to securing a new seven-year budget and a sizable virus recovery fund
to help those countries most badly hit. That fund embodies a collective
European debt for the first time.
The E.U.
also has had to cope with internal challenges to the rule of law and continuing
antagonism from President Trump; craft a tougher stance toward China and
Turkey; agree on sanctions against Belarus; try to find a coherent response to
calls for strategic autonomy and more European defense; come together on
climate goals; and prepare positions for the administration of President-elect
Joseph R. Biden Jr.
Compared
with many of those issues, Brexit was always a “third-order problem,’’ said
Guntram Wolff, director of Bruegel, a Brussels research institution.
Still, he
said, “the deal is quite an achievement,’’ one that he and many others had
thought unlikely even a week ago.
But
Chancellor Angela Merkel of Germany, whose country holds the revolving
presidency of the bloc until the end of the year, “really wanted a deal,” Mr.
Wolff said. The Germans, with Europe and NATO as core national interests, see
Britain as too close, too big and too important to be allowed to drift away
without one.
Ms. von der
Leyen, who had served in Ms. Merkel’s cabinets and is close to her, and who got
this job at the instigation of President Emmanuel Macron of France, was ideally
situated to do the final compromises — checking back with European capitals —
that have finally produced a deal.
“I’m sure
the Germans made their desires clear” to Ms. von der Leyen, Mr. Wolff said.
“But you need the president of the commission to directly call the Elysée and
the Chancellery and do the deal.’’
The final
deal is a free-trade agreement that recognizes Britain’s desire to leave the
single market and the customs union while preserving tariff-free, quota-free
trade in goods with the European Union.
To that
end, Britain agreed to a mechanism, with arbitration and possible tariffs for
violations, that would keep its regulations and subsidies roughly in line with
those of Brussels, to prevent unfair competition. But the deal will require
inspections of goods to prevent smuggling, especially of live animals.
The deal
also covers many mundane but crucial matters of visas, health insurance, and
air, rail and road travel. It treats Northern Ireland, which is part of the
United Kingdom, as within the E.U. customs area to prevent the need for a hard
border on the island, but requires some checks on goods going from Britain to
Northern Ireland.
And the
deal reallocates fishing areas and quotas, given that Britain is now an
independent coastal state.
Real power
in the European Union rests with the member states, but they authorized the
commission and the chief negotiator, Michel Barnier, to hammer out the
complicated treaty while laying down their red lines.
Mr.
Barnier, working with a varied series of counterparts as British governments
changed, brought the member states together. By constantly briefing them and
the European Parliament, he managed to keep the bloc unified despite British
efforts to deal directly with various capitals.
When the
hardest political decisions had to be made, the British prime minister had to
speak to Ms. von der Leyen. Though their relationship is cool — she seems
vaccinated against the shambling charm of Mr. Johnson — she delivered.
If Henry
Kissinger used to complain that the European Union had no phone number to call,
the Lisbon Treaty, which went into force 11 years ago, did much to clarify
matters and to personalize the bloc into three presidents — Charles Michel of
the European Council of member states and David Sassoli of the European
Parliament, as well as Ms. von der Leyen.
So while
Mr. Johnson’s predecessors used to complain bitterly about the power and whimsy
of Ms. von der Leyen’s predecessor, Jean-Claude Juncker, Mr. Johnson did have a
number to call.
In the end,
this is a narrow free-trade deal, but one that grants Britain more trading
rights within the European Union than any other third country. But it does
create a lot of paperwork and delays and does not include services, which make
up some 80 percent of the British economy.
And it will
inevitably have a larger and more negative impact on Britain, given the
comparative size of the two entities. Britain earns about 13 percent of its
gross domestic product from exports to the European Union, which earns just 3
percent of its G.D.P. from exports to Britain.
But the
deal lays the groundwork for more talks and better relations. Denis MacShane, a
former Europe minister for Britain, calls this “Brexiternity,’’ given the many
years of talking still to come.
Ms. von der
Leyen’s tenure began rockily, with a concentration on migration as the virus
took hold in Europe and began to paralyze movement of goods and people, even
within the Schengen zone of free movement. Health was never a central
competence of Brussels, left to the states, and Ms. von der Leyen and the
commission often seemed at a loss.
She was
also criticized for being too aloof, for working with too small a coterie of
advisers and for engaging a private company to improve her public relations.
But greatly
aided by her close relationship with the German and French leaders, she pulled
the commission together to improve the movement of goods and people, and to
organize collective purchases of personal protective equipment and then of
possible vaccines, at a favorable price.
She also
basked in the glow of the German-French compromise that finally allowed
collective debt to be created for the virus recovery fund. It also led just
this month to agreement on the seven-year budget, the fund and the ability to
condition some future spending on adherence by member states — Hungary and
Poland in particular — to the rule of law.
There was
also agreement in long discussions over climate goals, to more realistically
hope to become carbon neutral by 2050. Much of that groundwork had been done by
the commission.
As usual
with the E.U.’s 27 member states, the victories are hard-fought and not always
easily explained. But a Brexit deal was either going to be done by the end of
the year or not. And Ms. von der Leyen delivered.
“Does that
mean that she has become a strong commission president?” Mr. Wolff, the Bruegel
analyst, said. “I’m not sure I would go so far. But this was important, it was
delivered, and it would have been a mess if it had not been delivered, and
European citizens would not have understood a failure on top of the economic
damage already done by the virus.’’
Steven
Erlanger is the chief diplomatic correspondent in Europe, based in Brussels. He
previously reported from London, Paris, Jerusalem, Berlin, Prague, Moscow and
Bangkok. @StevenErlanger
At long last we have a Brexit deal – and it's as bad
as you thought
Tom Kibasi
We already know its contours: a barely-there treaty
that will make trade harder and destroy jobs. Labour should oppose it
‘The main impediment to a better deal is not the EU
but hardline Tory ideology.
Thu 24 Dec 2020
15.32 GMT
Boris
Johnson always expected news of a deal to be greeted with jubilation. It was to
be his moment of triumph after three decades of climbing to the summit of
British politics by railing against Brussels. The rightwing press dutifully
rallied. Even Nigel Farage declared: “The war is over.”
But with
Britain in a state of crisis because of the government’s botched response to
the pandemic, most people will react with relief or perhaps indifference. For
all the triumphalist claims of the Brexiters, the sunny uplands they told us to
expect are no more than another cold, dark, wet winter’s day. The 11th-hour
antics means there will be little scrutiny of a trade deal that could shape
Britain’s economic destiny for a generation.
As a means
to lower expectations and add drama, Johnson continued to perpetuate the
“no-deal” hoax of his predecessor – that it was so plausible that he would
pursue such a ruinous outcome is no credit to him. The notion that some of the
world’s largest economies would go into meltdown over a few middle-aged men
with outsized egos and puffed-up chests arguing about fish was always
ludicrous. And embarrassing.
It is a sad
indictment of our political and media class that so many played along. Brexit
was always in part fuelled by the allure of destroying the present. The farce
has been presented as a drama, when reversing more than 40 years of cooperation
for peace and prosperity is truly a tragedy.
The Brexit
deal itself is nothing but thin gruel. It will make it much harder for Britain
to sell services to EU countries, where we were once advantaged. Britons will
lose their right to freely travel, work and settle in other European countries.
While there will be no tariffs or restrictions on the quantity of goods that
can be sold, British exports will for the first time in decades face checks on
their origins and compliance with EU regulations.
The
government fought hard for regulatory autonomy that it imagines will allow
Britain to achieve escape velocity from economic reality. It is a fantasy.
Britain’s producers will need to meet EU regulations to sell into their most
important export market, no matter what bureaucrats in Whitehall may say. A
separate set of British regulations for companies to comply with harms rather
than enhances our international competitiveness.
After
nearly half a century of closer integration with the European economy, Britain
is now locked into needlessly throwing up new barriers to trade with our
closest neighbours. As the past few days has shown, the ports can quickly
descend into chaos. Even if implementation of the deal is smooth – a big if –
it will prove costly to the UK economy, with the Institute for Fiscal Studies
estimating it will knock more than 2% off growth and see inflation climb to
3.5%. That means fewer good jobs, lower incomes and higher prices.
The dual
impact of the pandemic and Brexit has pushed business investment – the engine
of wealth creation – down by 30% from its long-term trend. With the deal seeing
Britain now outside the world’s largest single market, it will make this
country a less attractive place to invest. Britain has long been reliant on the
“kindness of strangers”. They will not look kindly on this deal. No serious
economist would ever recommend trashing your trading arrangements with your
biggest trade partner.
This
outcome was a choice of Johnson and the Conservative government, not an
inevitable consequence of the vote to leave in 2016. People voted not to
terminate our economic cooperation but to put it on a new and different
political basis, with sovereignty more explicitly and firmly rooted in
Westminster rather than pooled in Brussels. Instead, Britain will have the same
trading arrangements as far and distant countries.
What’s
more, this deal will see the poorest communities across Britain hit hardest –
especially in the north and the Midlands, which are more reliant on
manufacturing, set to be a significant loser. For all the talk of “nothing to
lose”, analysis by IPPR shows that a Brexit deal like this will cause the most
harm to those least resilient to it. Why would Labour support such a poor
result for Britain?
Perhaps the
limpest argument is that a vote against this deal is a vote for no deal. As the
miserable years since the UK voted for Brexit have taught us, deadlines are
imaginary lines drawn up by politicians that can change with sufficient
political will. The main impediment to a better deal is not the EU but hardline
Tory ideology. Besides, the Tories have a large majority so any parliamentary
vote is about what the opposition parties believe rather than whether the deal
will be implemented.
It was
Labour’s abject failure to arrive at any coherent political position on Brexit
in the last parliament that was one of the many reasons for its dire showing at
the polls in December 2019. But the plan to vote for the deal shares the same
political thinking as Labour’s disastrous embrace of austerity under Ed
Miliband – where the same Westminster logic led it to follow polling rather
than to show leadership. Do not expect the electorate to thank Labour for
abandoning its principles and voting in favour of a deal that will damage
Britain. They won’t.
Convictions
in politics matter. Had the 2016 referendum gone the other way, does anyone
seriously imagine that Tory Brexiters would say they had to accept the result
and march through the lobbies in favour of the latest EU treaty? Voting in
favour of a shoddy deal will surely dampen the enthusiasm of many of Labour’s
supporters, the vast majority of whom have always been rightly hostile to the
hard-right Brexit project.
Failing to
oppose the Tory Brexit deal will leave Labour mute for years to come as the
damage unfolds, unable to prosecute its central argument to sack the Tories.
Forecasters already expect that Britain will have one of the slowest recoveries
from the Covid crisis precisely because the economy faces Brexit disruption at
the same time. If Labour votes with the government, shadow ministers will have
any critique answered with: “Well, you voted for the deal.” Surely Labour wants
to be able to argue that the Tories have bodged Brexit along with everything else
– which is why the electorate should sack them and put Labour into power.
A thumping
majority for the Brexit deal would hand Johnson precisely the “reset” moment
that his rocky premiership so desperately needs. It would see the prime
minister end a torrid year with endorsement not only of his deal but also the
disgraceful tactics he employed to secure it. It will leave Johnson cock-a-hoop
just as he is wallowing in failure over his handling of the pandemic.
This lousy
deal is bad for Britain. That should be the only yardstick that matters. It is
not complicated. Labour should oppose it.
Tom Kibasi
is a writer and researcher on politics and economics
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