In the final party leaders debate of the 2020 general election, Leo Varadkar exclaimed ‘Brexit isn’t finished, it is only half time!’ This is a point made repeatedly by Fine Gael throughout the campaign. The statement is made again and again for political gain; however, it is absolutely true. If you were sick of Brexit dominating the news agenda for the past few years you will be disappointed to hear it won’t be resolved any time soon. The UK may have officially left the European Union on the 31st of January, but long and difficult trade negotiations now are due to commence.
Despite the lengthy negotiations which have already taken place, the future trade relationship between the EU and the UK still needs to be agreed upon. Since the UK triggered Article 50, beginning the process of leaving the EU, both sides have only managed to sign off on the withdrawal agreement. This main aspects of the agreement are the financial settlement the UK owes the EU, a special protocol for Northern Ireland to avoid a hard border, a section on citizens ‘rights for EU nationals in the UK and vice versa and it also includes a political declaration in which both parties stated their hopes for “an ambitious, broad, deep and flexible partnership.” While these are important issues that needed to be resolved, it does not address how the EU and the UK will trade after the transition period. This is a period up until the end of 2020 in which the UK remains in the EU customs union and single market and obeys EU rules and regulations while negotiations take place. Boris Johnson has ruled out the transition period being extended which means the entire trade agreement must be completed in less than a year.
For the UK, these trade negotiations will be uncharted territory, trade deals until now were done at EU level and national governments of EU members could not negotiate bilaterally with other countries. Now the UK must face an EU that has a huge amount of experience in dealing with trade talks. Like all trade talks, this one will be a case of compromise as both sides come to the table with different objectives. According to Dr Andy Storey from the School of Politics and International Relations here at UCD, the EU will look to “ensure that the UK maintains regulatory alignment with them if it is to enjoy access to the single market.” If the UK wants to trade freely with EU countries it cannot differ in any great extent from EU regulations nor use state aid to give UK companies a large comparative advantage over EU companies that are competing within the European market. On the other hand, Dr. Storey told us the UK would want ‘access to the single market but also the freedom to set their own standards and cut separate deals with other countries.’ Clearly, there is a tension here. The UK cannot have both free trade and no ties to EU regulation. Over the course of negotiations, both sides will need to compromise in some areas and strike a balance with these two tensions.
Given the complexity of international trade and the large differences in objectives for these trade talks, both sides will be facing huge pressure to find an agreement. Since the UK has taken a legislative step to end the transition period before 2021, the likelihood of a comprehensive trade deal actually being finalised looks difficult. The UK wants a completely new relationship with the EU, unlike any other countries’ trade relationship. According to Dr. Storey, the possibility of the two sides agreeing a “comprehensive, bespoke deal within a year is probably otherwise unrealistic.” There is also a very important political dimension to the negotiations. It would be in Boris Johnson’s political interests to take a hard line with the EU and not allow too much alignment with EU regulations. Also, the EU will not want to give the UK a favourable enough trade deal that makes it look like leaving the EU could be in any other country’s interests. These external political pressures can put great strain on trade negotiations, particularly in the fraught political atmosphere of Brexit Britain.
Making predictions about outcomes in relation to Brexit has always been a difficult task for political analysts. The only certainty about these upcoming talks is that they will be complicated, tense and perhaps sometimes ugly. Given the time pressures, it is not too unlikely that we may see a very basic trade agreement concluded in a year with a more comprehensive agreement to follow in the years after. There will certainly need to be a balance between complete free trade between the two sides and the UK having to adopt some EU rules and regulations. Like everything with Brexit, the details will prove to be complicated and the political dimension will be fascinating.
Conor Paterson – Politics Editor