It was a much needed Christmas gift for the British Prime Minister, Boris Johnson. He was insistent throughout the last few months that London would be willing to walk away and that the UK would “prosper mightily” if there was no agreement in the end. Yet the uncertainty and the leap into the unknown was a real danger which pushed him to be personally involved till the last minute in the negotiations with the European Union (EU) trying to avoid the potential disruption of a relationship that has lasted four decades without a ready replacement.
It has been a long process ever since the UK became the first country to leave the EU known as Brexit — British exit — after the referendum of June 2016 in which Britons voted 52% to 48% to leave the EU. Since then the UK and the EU have been trying to define the future contours of their relationship but the negotiations went to the wire, as the current arrangement ends on 31 December. Though the details of the final pact are yet to be released, the full document is more than 1,600 pages long with new rules for how the UK and EU will live, work and trade together.
The two sides had very different priorities and the fact that they both are declaring victory at the end of contentious negotiations is remarkable diplomatic accomplishment. And for Boris Johnson this is a personal victory as he can now claim that he has managed to protect national sovereignty after Brexit, an ambition that had been driving the entire agenda of the Brexiteers.
After this deal, the economic uncertainty has ended as this free trade pact has ensured that between the UK and the EU there won’t be any tariffs and quotas on each other’s goods when they cross borders. Given that the EU is the UK’s biggest trading partner, this is big deal for the businesses which were getting jittery about the prospects of a deal Brexit. The EU wanted to protect the single market from what the possibility of unfair competition from UK businesses as the governance structure undergoes a change in Britain. This was a major sticking point in talks. Not surprisingly, the European Commission president Ursula Von der Leyen made a point to emphasise that competition rules “will be fair and remain so.”
Even though “the clock is no longer ticking,” the deal agreed is still not law as it requires ratification by both the UK and European parliaments. The European Parliament won’t be able to sign it off before the end of the year given the time constraints but the UK government will summon parliamentarians to Westminster on 30 December to vote on the deal. The deal will come into force on 1 January in any case with both sides trying to get over this last hurdle without any further delays.
The challenges remain on multiple fronts. The operationalisation of this deal will be closely watched as the new year will commence with some immense changes for ordinary Britons. So far for all the talk of Brexit, there has been no real impact on the lives of people. All that will change now and it would be interesting to see how ordinary British people react to those changes. With Britain out of the EU’s customs union and single market, there will be considerable non-tariff barriers for British good entering the EU from 2021. Also, this agreement doesn’t deal with services which will have to be taken separately later on and that will be critical for the UK given its huge services sector. This will be particularly difficult time for the UK financial sector whose entry into the EU would depend on EU’s decision without any negotiating space for the UK. The data flow between the two will also have to be addressed later on.
But both sides would be happy with the outcome as of now despite future challenges. These negotiations were a damage control exercise and in that they have succeeded. For the British Prime Minister this is a personal victory after a series of setbacks. No wonder he was euphoric when he suggested that “we have taken back control of our laws and our destiny” even as he stressed the UK “will remain culturally, emotionally, historically, strategically and geologically attached to Europe.” For the EU too, this is time to move on as Ursula von der Leyen underlined in her statement that the deal was “fair” and “balanced” and it was now “time to turn the page and look to the future.”
As this year has underscored, the challenges that the EU and the UK face have evolved dramatically this year. With the continuing Covid-19 pandemic, decelerating economies, an inward looking America, a belligerent China, and an unprecedented flux in the Indo-Pacific, both the EU and the UK have to look beyond their immediate periphery. And in some ways, despite Brexit, working with each other is a strategic imperative for both. More than anything else, it was this realisation that made the Christmas Eve deal possible.
Harsh V. Pant is Director, Studies and Head of the Strategic Studies Programme at Observer Research Foundation, New Delhi. Views are personal.
This article has been republished with permission from ORF.