21 October 2019

Boris’ deal secures a truly independent UK trade policy

by IFT

In his speech launching IFT in 2017, Boris Johnson said:

“When [British companies] are unbound, unshackled, and unleashed from the coils and toils of the Common Commercial Policy, we have an extraordinary future ahead of us.”

In securing this new deal with Brussels, he has set the United Kingdom on a path toward that same vision.

His success has been a major political victory. It was received wisdom that the EU would not reopen the Withdrawal Agreement, that the backstop was the only solution to the Irish border question, and the only movement could be towards staying in the EU Customs Union. These have been exposed as falsehoods.

Such was the level of belief amongst the Westminster politerati, that they seem blindsided by the fact that a deal has emerged at all. Little consideration is being given to its content; most coverage is focusing on whether Boris has the numbers to pass the deal through the Commons. MPs are deciding which way to vote not according to the substance of the deal, but according to how they have painted themselves over the past three years: Jeremy Corbyn came out against the deal before it was even released, while Andrew Bridgen declared his support on the basis that it “smells like Brexit”.

Yet this deal is complex, more so than Theresa May’s deal, and the details matter. The changes map out a different path for Britain and the EU, with a looser relationship than the one envisaged by May. It will have ramifications for Northern Ireland and the UK’s future trading relationship with the world.

Despite these upheavals, the new deal was only made possible by the amount that has been left untouched: the divorce bill, the transition period, and citizens’ rights are still where Theresa May left them. The UK Government was fundamentally correct in seeking to replace the backstop and fix Northern Ireland’s position post-Brexit. The issues will have lasting impact on people’s lives long after the £39 billion has become a distance memory. It was no coincidence that the only version of Brexit to have passed the Commons was May’s deal without the backstop.

The problems with the backstop were two-fold. First, the UK would be unable to benefit from an independent trade policy. It would be locked in the EU’s Customs Union, subject to the EU’s common external tariffs and having its market offered up in trade deals with no guarantee of reciprocal access. Second, there was no exit mechanism that the EU would not have had an effective veto over. The backstop would have been in place until suitable “alternative arrangements” were in place. The only pressure for the EU to deliver them was a legally weak obligation to “best endeavours”. The legal codicil (retroactively attached to sooth fears) also offered little in the way of further obligations.

These issues have been dealt with in the new deal. Instead of the backstop arrangement, there will be checks on goods entering Northern Ireland from Great Britain. Duty will be paid on any goods that are considered “at risk” of being transported on into the EU; but if those same goods ultimately stay in Northern Ireland, the company that paid the duty will receive a rebate. While this is complex and will need fine-tuning, it will see the UK leave the EU’s customs union, giving it complete control over its trade policy, while avoiding a hard border between the UK and the Republic of Ireland.

Additionally, the arrangement has an exit mechanism that lies solely with the people who are most affected: the people of Northern Ireland. The provisions affecting Northern Ireland will be subject to a vote in Stormont, the Northern Irish Assembly, requiring a simple majority. This vote will take place four years after the end of the transition period, which means that, at present, the vote would be in January 2025. On how this sits with the Good Friday Agreement, it seems wise to follow Lord Trimble’s lead:

“Whilst, previously, the people of Northern Ireland were to have an agreement imposed on them, now we have a mechanism for the consent of the people of Northern Ireland. This is fully in accordance with the spirit of the Good Friday Agreement.”

Finally, the political declaration has been liberated with the UK no longer aiming for a customs arrangement with the EU. The Government’s new position is for a free trade agreement, which is where the EU have agreed to deal with the so-called level playing field provisions. In that area, there will many areas where the UK will naturally want to align; and others where it might look to innovate opportunities for competitiveness.

If this deal is eventually voted through, the UK will be able to move onwards and upwards towards a free trading future with a global outlook. If rejected, the Conservative party should have faith in this deal being enough to carry them through a general election. For those who hoped that Brexit would secure an independent UK trade policy, it will not get better than this.