Brexit

Brexit the Year After: A deal for good?

Exactly one year ago today, the United Kingdom officially left the European Union. But without an agreement on the future relationship, both sides agreed on a transition period until the end of 2020, during which all EU rules and laws continued to apply to the UK. This started a period of 11 months of intense negotiations to conclude a new trade and cooperation agreement for the future EU-UK relationship. Under immense time pressure, EU and UK negotiators crunched out a deal just before the end of the year. Most importantly, this meant that a no-deal scenario, which would have dramatic consequences for the UK and EU economies, was avoided. But is that enough to make it a good agreement for Liberals on both sides of the Channel?

Avoiding a no-deal was welcomed from all sides, but the content of the new agreement was met with mixed responses. On the positive side, the deal preserves the integrity of the EU’s Single Market and provides for some level of continuity. However, many issues are not fully addressed and some not at all. This will create new frictions and will probably lead to a permanent state of renegotiation. Coupled with new trade obstacles, this is not the close and stable partnership that Liberals fought for.

The deal

The post-Brexit relationship between the EU and the UK is laid down in the EU-UK Trade and Cooperation Agreement, which covers approximately €730bn worth of trade and stretches to 1.246 pages. The document deals with three broad areas: trade, security and the overarching governance framework.

On trade, the two sides have agreed on the duty- and quota-free trade of goods, thereby avoiding additional costs for businesses and consumers. Nonetheless, Brexit will inevitably make trading more difficult, as there will be new bureaucracy and strict rules of origin requirements.  

The trade agreement also covers services, but only in a limited way. While the deal includes some provisions that support cross border services trade, the potential of these arrangements is restricted because of a large number of exceptions that vary both by country and by service type. Additionally, it remains unclear if the professional qualifications of professionals will receive the same recognition as before the deal.

Security is another area where the deal is very thin. The UK’s presence in the EU’s police and judicial cooperation structures has been significantly downgraded, despite a clear interest from both sides to maintain strong links. As a result of the deal, the UK is no longer involved in the management of Europol and Eurojust and it can no longer access key Europol databases.

Despite these shortcomings, key stakeholders in both the EU and in the UK received the agreement as an acceptable outcome. On 28 December, EU Member States agreed on the deal, which then took effect on 1 January 2021. Two days later, the agreement was also billed in the UK parliament, where MPs approved it by 521 votes to 73. As a final step, the deal still awaits retroactive ratification by the European Parliament, which is expected in late February.

Liberal responses

In the past weeks, the agreement has been analysed from many different legal, political and social angles. But particularly interesting is the response from Liberals decision makers. Liberals have been strongly engaged in the discussions on Brexit since the beginning and have been a strong force in shaping the negotiation process.

In the UK, Liberals immediately voiced strong objections to the agreement. UK Liberal Democrats leader Sir Ed Davey spoke of a “red tape bonanza” and warned that the deal is “bad for jobs, business, security and our environment”. This view was also reflected in the vote on the agreement in the House of Commons, with all Lib Dem MPs voting against. This is hardly surprising, given the strong opposition of the Lib Dems against the Brexit process. With a long-term objective or rejoining the EU, we can expect continued opposition from the Lib Dems against the Brexit project.

On the EU side, there was broad support for the deal on the legislative front. However, Liberals from across Europe also lamented the de facto downgrade of EU-UK relations and the broader implications of the agreement.

Vocal Brexit commentator Guy Verhofstadt lauded the work of the EU’s chief negotiator, Michel Barnier, and said that the Brexit process has made the EU “more united and stronger”. At the same time, he also recognised that the deal was less ambitious than previously desired.

French President Emmanuel Macron echoed this sentiment and said that the agreement defends “our interests, our industries, our fishermen and our European unity”. Others, such as, Ireland’s Prime Minister Micheál Martin, noted that there is “no such thing as a good Brexit”.

From a German point of view, Alexander Lambsdorff MP also highlighted the exclusion of the Erasmus programme for European student exchanges from the deal. This will have a significant effect on the possibilities for EU students to do exchanges in the UK, and vice versa.

The Liberal Take

When bringing together the responses from Liberals around Europe, we can distil a few common ideas. A positive outcome for Liberals is that the integrity of the EU’s Single Market was protected. Liberals from all over the EU warned from the start that Britain should not enjoy the benefits of EU membership from the outside. The new barriers have created a clear difference between membership and non-membership and thereby kept the Single Market intact.

At the same time, the introduction of trade barriers is also the biggest loss for Liberals. In international agreements, Liberals have always argued for economic openness and interconnectedness. This is one of the core ideas of the founding of the European Union and a fundamental principle for international trade relations. The fact that the deal introduces new barriers and reduced the interconnectedness can therefore also be seen as a failure from a Liberal point of view.

Perhaps the most impactful takeaway, however, is the fact that the deal will not be the end the Brexit process. The agreement covers a broad range of topics, but many of them are not fully addressed. In fact, several issues, such as the linking of the UK’s carbon pricing scheme and the storage of personal data of EU citizens on UK servers, will already be up for revision in 2021. And with many other issues still unresolved, we can expect the future EU-UK relationship to be characterised by a permanent state of renegotiations.

Concretely, this means continued uncertainty for businesses and consumers, and unpredictable relations in the long term. Legal uncertainty is a bad foundation for future relations and this will probably be reflected in trade volumes and investment from the EU to the UK and vice versa. For Liberals, these are lost opportunities.  

Jeroen Dobber is European Affairs Manager and responsible for the foundation’s programme in the United Kingdom at the Friedrich Naumann Foundation for Freedom’s office in Brussels.