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The EU/UK Trade Deal: Boris Achieves the “Impossible”

UKs internal market
Written by Robert Lee

Economist and investor Rob Lee reflects on the Trade and Cooperation Agreement and how it was achieved. He agrees with Boris Johnson’s assessment, “this may not be a cake-ist treaty …but it is certainly from the patisserie department”.

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The UK legally left the EU on 31st January 2020, with the existing trade and security arrangements extended in a transition period until the end of the year. This left only 11 months to conclude a comprehensive trade and security agreement to replace the status quo. The great majority of media commentators, the political opposition, much international opinion and the EU itself believed that it was impossible to achieve such an agreement in such a short period. They also agreed that the UK leaving without a deal would be “catastrophic” (post-referendum a vastly over-used word) for the UK. It was therefore considered inevitable that the transition period would be extended, and that ultimately the UK would accept an agreement largely on EU terms.

Happily Boris Johnson and his doughty chief negotiator, Lord David Frost, didn’t get the global elitist memo. The entire Cabinet signed up to going for “no deal” if an acceptable deal was not forthcoming. Significant resources were devoted to “no deal” preparations. The key negotiating red line was set as the full return of UK sovereignty – literally to take back control of our laws, borders, money, and fishing waters – with no role for the ECJ (European Court of Justice) as the litmus test. Genuine EU concerns were to be recognised in that the UK would only ask for arrangements that had already been agreed by the EU with other nations. The EU/Canada deal was taken as a template. Under no circumstances was an extension to the transition period to be considered. Under enormous pressure from all sides- in the latter stages even from President-elect Biden – this negotiating strategy was never deviated from.

It seems it was only late in the day that the EU was finally convinced that the UK was prepared to walk away. According to Alexander Von Schoenburg, editor of Germany’s best-selling newspaper Bild, it was only when Boris Johnson threatened to renege on part of the Withdrawal Agreement that the penny finally dropped. The five living former UK PM’s all bitterly criticised this move, which was only triggered in response to an EU threat to effectively impose a partial blockade on N. Ireland. Perhaps their unwillingness to fight fire with fire is why these five were all so unsuccessful in dealing with the EU?

It is important to emphasise that this clear and unyielding strategy was combined with a genuine desire on the part of the UK to achieve a deal that worked for both sides. It is difficult for many of Boris Johnson’s detractors to accept but he has a genuine gift for winning people over in personal meetings.  And he is far from the “populist buffoon” that some of his more extreme critics allege. Praise is also due to EU Commission President von der Leyen, particularly in getting France to climb down from its more ridiculous demands. The net result is that the UK has met the negotiating objectives it set out to achieve. Even the legal team set up by the Tory Party’s arch-Brexiteer ERG (European Research Group) pronounced themselves satisfied that full sovereignty has been restored. Furthermore, this is the first FTA (Free Trade Agreement) in history to be completely tariff free and quota free.

The agreement has been criticised by the Parliamentary opposition for containing little for the UK’s dominant service industries, omitting to mention that the EU single market in services barely exists.  The UK has compromised significantly on fishing rights, with full control over fishing waters only achieved after a five and a half year transition period. Nevertheless, the UK’s share of the total catch in its waters will rise over this period from the current 50% to around 65%, with half of this uplift occurring this year. A £100m fund is to be set up to help prepare the industry to take full advantage of the longer-term potential released by the agreement. The UK fishing industry will be restored to prosperity as promised, albeit more gradually than some would have liked.

Some of the legion of Brexit pessimists continue to quibble over details, but most have been reduced to silence. A few have even recognised the truth – this deal is good news for both the EU and the UK and an extraordinary triumph for Boris Johnson. He has pulled off what even some of his close supporters and Cabinet colleagues thought was impossible. In the words of Mr Schoenburg, “Today, Europeans of all stripes know Boris as the man who stood up to the European behemoth and, against all the odds, won the day for his country”. Long accused of trying to “have his cake and eat it”, in his own  inimitable words this “may not be a cake-ist treaty …but it is certainly from the patisserie department”!

Robert Lee January 5th 2021          

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About the author

Robert Lee

Robert Lee is an economic consultant and private investor.