Written by Harry Western
This article was first published in Briefings for Brexit and we re-publish with their kind permission.
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The renegotiated deal Boris Johnson has agreed with the EU and recently presented to parliament is an improvement on that negotiated by former prime minister Theresa May. But it nevertheless offers only the narrowest and most precarious bridge to economic freedom for the UK.
What are the upsides? From the perspective of putting the UK back in charge of its trade and regulatory policy, the main improvements Johnson has negotiated are:
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The removal of the Northern Ireland backstop
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An amendment to the political declaration which makes it clear that the future relationship between the UK and the EU will take the form of a free trade agreement, not a customs union as previously. This allows the UK the potential to develop an independent trade policy.
These changes are important as May’s withdrawal agreement would have removed all the UK’s leverage in phase two of the talks with the EU, locking the UK into a customs union with the EU and tight regulatory alignment in perpetuity – with the UK having to passively accept any trade and regulatory laws passed by the EU i.e. vassal status.
But there is still much to be concerned about:
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Johnson’s ‘deal’ does not involve a new free trade agreement with the EU. This is a critical point that is often overlooked. All the deal does is open the way to negotiating a new free trade deal, a process that could take some time depending on how well the UK negotiates and how keen the EU is to proceed with such talks.
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Until such a deal is finalised, the UK enters a ‘transition period’. This is actually a misnomer – normally one would understand this a period where the two sides take time to adjust to newly agreed arrangements. That isn’t what it is, in this case. Instead, it will involve the UK effectively remaining in the EU and subject to all its laws and regulations – old and new – with no say. The UK will be able to negotiate – but not bring into force – trade deals with third countries. Aside from this though, this ‘transition’ is a vassal state period.
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The ‘transition’ could extend for up to three years. In theory the transition ends at end-2020, which might be tolerably short. But there is a clause allowing it to be extended for a further two years if no final agreement is reached. Moreover, a decision on this will need to be made as early as July next year. This leaves a very short space of time to agree a free trade deal.
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In the transition, the UK will be wide open to regulatory attacks by the EU on key industries. We can be pretty sure this will happen – only the extent is in question. The EU will do this in order to try to maximise its leverage in talks and push the UK towards agreeing the most subservient relationship possible. Among other things, we can expect attacks on the UK financial services industry including the ramping up of existing EU attempts to charge the UK billions of pounds related to VAT on derivatives.
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The UK has surrendered key leverage. The UK in Johnson’s deal has agreed to an exit bill of c£39 billion – and quite possibly significantly more. There is no link between the payment of this and agreeing a free trade deal
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There is no get out clause from this deal if the EU proves unreasonable. This deal will take the form of a binding international treaty. Such treaties usually give the parties the right to withdraw, having given reasonable notice. This one doesn’t – the UK cannot walk away from it however unreasonable the EU proves to be.
Even given these major drawbacks – and there are many others, including the very suboptimal arrangements for Northern Ireland – it might be possible for the UK to use Johnson’s deal to achieve the kind of goals Brexit is supposed to achieve: control of trade and regulations, laws and taxes; an independent economic future for the UK. But this will be very difficult. It would need:
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The UK to be absolutely willing to embrace a no-deal, WTO exit at the end of 2020 if necessary. Only if it is clear to the EU that this is the real default outcome if they fail to negotiate seriously, will serious EU negotiation take place.
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The UK to aggressively pursue trade deals with third countries. These need to be used to pressure the EU. The more the EU’s current trade preferences in the UK market are potentially eroded, the more likely they are to negotiate a free trade deal. The UK absolutely must not soft-pedal on trade deals with third countries for fear of ‘prejudicing’ a deal with the EU – quite the reverse. The UK needs to create competition among its trade partners to get the best deal, rewarding the quick negotiators, punishing the laggards.
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The UK should adopt tax and regulatory changes the EU won’t like, where it has the scope. A rapid move to cut corporation tax to Irish levels would be a good start. The UK should also make clear it will be clearing away some of the more damaging EU regulations (e.g. MIFID) as soon as it is free to do so. Such moves would be an important statement of intent.
The key problem with all of the three above approaches is that it is impossible to see them happening with the current composition of the UK parliament. This brings us to a clear and perhaps downbeat conclusion: Johnson’s deal has no chance of achieving the economic goals Brexit supporters might hope for from it, without a general election victory and radical shift in the makeup of the House of Commons.
The Brexit Party and UKIP have so little difference that they may as well be one Party, I suggest that UKIP accept the need as being more important than a little “losing-face” and become members of TBP – for your nation´s sake.
All commentators on here have overlooked the last item in the article. WE CAN STILL MAKE IT CLEAR WE WILL EMBRACE THE NO DEAL OUTCOME. and must do so. Also my understanding is that under this WA we immediately are free to trade world wide.
“under this WA we immediately are free to trade world wide” Unfortunately not. See e.g. even https://lawyersforbritain.org/this-flawed-deal-is-a-tolerable-price-to-pay-for-our-freedom . “During [the transition] period, the UK would be subject to all EU laws, both those that exist now and those that are brought in during that period, but would no longer have a vote or veto. … The most important and damaging feature which remains is the long term subjection of the UK to rulings by the ECJ.” The “transition” period will last at least until the end of December 2022, and during this time, the UK will be subject to all EU law, existing and new and the court that will have supreme jurisdiction over the UK will be the ECJ. This means full regulatory alignment, and this means the UK will be unable to agree any free trade agreements with anyone on which it is able to deliver, since it will have no sovereignty over its own laws: the UK could agree something with the USA, the EU could legislate to the contrary, and the UK would have to obey the EU. No country will waste time entering into FTA negotiations with the UK while such a state of affairs persists. So no free trade deals with anyone until the end of the “transition” period and I’d say much longer than that.
Apparently Martin Howe QC of Lawyers for Britain is on the Beaconsfield PPC list. Hmm…
For the Conservatives
That would explain a lot. Like why he has sold out in his latest article on the Boris Vassalage Treaty.
This is not Brexit so why does everyone try to force us to accept it?
A spokesperson for the European Commissions on Wednesday insisted that the EU had merely made “clarifications” to Theresa May’s Brexit deal and that it had not been “amended” in any meaningful way.
This is at odds with Downing Street’s presentation of negotiations: the prime minister hopes to get his agreement through parliament on the basis that it is not the same as his predecessor’s, which was rejected three times by MPs. But it is…does everyone think Brexiters came down in the last shower?
Brexit Party – NO DEAL, is the only deal.
Yes Ziva, quite correct. The disturbing thing is that the whole Tory pack in the HoC, including the expelled section and those totally opposed to Leave voted for Johnson’s amazing new clothes. The backstop is still there but now in a more waterey location! If you want Brexit do not vote Tory. It is that simple. As you state “Brexit Party – NO DEAL, is the only deal.”
This is ridiculous. You only have to run a cursory eye over it to pick out glaring aggression at every level,. It is not and never has been anything other than complete spinelessnes and nastiness. Hitler or Chamberlain could have written it.
Johnson is in love with claiming his negotiations
Having read with keen interest many, many posts on this site – not ONCE have I read of a solution to the ongoing problem of the ‘Media’ and it’s almost total dismissal of the aims of The Brexit Party.
Yes, from time to time we have seen Nigel Farage ‘entertaining’ disparate groups of supporters from pubs, clubs and ‘meeting houses’ – but Policies or statements from his six hundred or so potential MP’s. – zilch!
OK, it is ‘early days’ one could claim – does it take some rioting or mob violence so as to call attention to ‘the cause’?
Will it take violent street demonstrations from Trafalgar Square to the Palace of Westminster, and Lands End, and the wasting of valuable police time, to confirm to the entire nation that TBP is truly serious in its aims, aspirations and expectations for the future of our beloved country?
How on earth will TBP gain attention and put its case nationwide without Media exposure?
An all-out Civil War perhaps? Come on UK – let THIS be OUR finest hour.
I have noticed the BBC news two days running has gone into great detail of all the various party political election launches except TBP. All they broadcast; and this very fleetingly, is Nigel Farage climbing up onto the stage, but the sound is cut so no-one can hear his message!
The conservative party needs a policy. The Brexit party just risks hilarity if it strays too far. They have nobody with knowledge or experience of anything much ( Likeukip nec ) except a vague handful of ambitions.
misterpaul5A, you want Nigel and the BP condidates to state policies ? Do you mean you want a Manifesto? Probably you do, because gullible people are swayed by full-of-promise Manifestos. Now ask yourself, does the ruling Party stick to it´s Manifesto or does it throw it in the trash-can and do something quite different ?
Regarding media exposure, how on Earth do you expect the MSM to give a fair deal to the BP when it is owned by Remainers ?
Though the thought is horrendous (and un-British) I fear that a revolution (or serious threat of revolution) is the only only answer.
Boris’s deal if I read it right is worse than May’s which I also read.We need to leave ASAP no deals WTO will see us through we never need a deal with crooks in Brussels That will give us an instant boost of 39/ 80 billion and also get rid of our liability of 500 billion to the EU Bank. They have trillions of our money in investments and cash we were forced into paying into the eubank which they have stated we will will not get 1 penny back
“There is no get out clause from this deal if the EU proves unreasonable. ”
Does anyone with any common sense believe that the EU will be reasonable? That would be so unlikely, based on past performance, that the answer must be “NO”. It is simply not in its nature to change its behaviour.
Upholding and ultimately delivering the will of the people to take back control of its laws and borders is best served by backing TBP up to the hilt. A vote for Lib/Lab/Con/Green/SNP is playing right into the hands of the machinations of those who seek to overturn Brexit.
As a life long tory voter there only 1 way I will vote , TBP and so will most of the people I know
Correct, Jake !
Boris ‘deal’ is simply May’s abomination with a twist or two but leaves us still the vassal state that Boris himself voted down.
The only party that will get us the clean Brexit that we want is the Brexit Party ! They don’t have a ‘manifesto’ because of the feeling that ‘manifesto’ = lies, so instead, the Brexit Party has a Statement of Policy.
Indeed Jake; we must not be swayed by the expected predictions of doom and gloom. The system is broken and voting for those who broke it is surely and example of Einstein’s definition of madness.