Whither Brexit: Contentions to be Settled in the Transition Period

On Wednesday, January 22, the British Parliament finalized the country’s bid to withdraw from the European Union (EU). The bill’s passage, made possible by the Conservative Party’s big win in the recent election, marked the first result of a more than three-year journey to Brexit. This week, with a vote of approval from EU member states on Thursday, January 30, Britain is scheduled to formally withdraw from the EU and enter an eleven-month transition period in which the two parties must agree on a final withdrawal agreement. The transition period will last until December 31, 2020, and Britain will remain under the EU’s purview until then. The major task at hand for Britain and the EU during this period will be reaching a comprehensive trade deal. 

Considering negotiations are not scheduled to begin until February, it is unlikely that Brexit will be completed by the scheduled deadline as a result of the sheer amount of time that it takes to process and approve such a major piece of legislation once an agreement has been reached. It took former prime minister Theresa May three years to attempt the delivery of a withdrawal agreement. However, even if the two sides reach an agreement by the end of 2020, it is unlikely to be comprehensive, with the potential of leading to severe economic downturn for Britain, the European Union, and the global market. Projections warn of dire consequences including a British GDP drop of up to 7 percent, as well as intense pressure on agriculture and pharmaceutical markets that could have life-threatening consequences for Britain’s most vulnerable.

To succeed in these negotiations, Prime Minister Boris Johnson must deliver a comprehensive trade deal that will not inflict severe harm on the British economy. Johnson says he will take Britain out of the EU even if the parties cannot reach a deal—the No Deal Brexit. However, a No Deal Brexit would be detrimental to the British economy. The stakes of these negotiations are high if Britain wants to avoid this grim consequence and to achieve a balance between British independence, which Johnson promised and campaigned on, and a successful transition, which will maintain the economic stability of Europe. 

The main goal of Brexit, for Johnson and the Conservative Party, is to free Britain from the social, environmental, and economic regulations they claim are hampering the British economy. Johnson’s ideal, which his administration has dubbed “Singapore-on-Thames,” is an independent Britain who can offer its citizens low taxes, while being competitive in the European market. Johnson promises Brexit will bring economic prosperity, which appeals to a widespread desire among Britons for freedom from the regulations and taxation of the EU. The other side of the argument, however, made by other British parties as well as Jean-Claude Junker, former president of the European Commission, is that EU regulation is only a popular scapegoat for the harmful effects of globalization on the British economy. More liberal Britons fear that Brexit, especially a No Deal Brexit, will negatively impact British businesses who will then have to pay tariffs on European trade and will lead to complications for both British and European citizens living between Britain and continental Europe under EU citizenship laws. 

Though the EU has been willing to work with Britain in their departure from the EU, it is steadfast about maintaining the stability of the European single market and the authority of the European Commission over states who participate in the free-moving economic system. Ursula von der Leyen, president of the European Commission, seeks to maintain a power balance through the Level Playing Field Provisions: a guiding principle that specifies the jurisdiction of the EU over the European market.The EU wants to implement restrictions that would allow Britain access to the European market while safeguarding against any unfair advantage relative to EU member states. The Provisions encompass fishing rights, tax and business regulation, and other economic issues that are to be hashed out in the negotiations after Britain’s official January 31 departure. 

Johnson has faced the greatest obstacles, from both Britain and the EU, in negotiating the Irish Backstop. The Backstop is a safety net which, were Britain to withdraw from the EU without a trade deal (as it is set to do next week), would prevent a hard border from being erected between Northern Ireland and Ireland. As the only land border affected by Brexit, defining trade regulations there will be illustrative of Britain’s autonomy from the EU. Once the backstop goes into effect, Britain will remain de facto under the economic regulations of the EU. Pro-Brexit critics argue Britain will not have economic autonomy or find a way out of the Backstop, even if a trade deal is reached.

The first withdrawal agreement Johnson presented revised custom agreements to grant Britain autonomy in the European and global markets. However, the proposal was rejected for the complications it presented with trade borders between Ireland, Northern Ireland, and Britain, which would have encompassed unfavorable tariffs for Ireland. After calling an early election in December and winning a large Conservative majority in Parliament, Johnson was able to pass his withdrawal agreement without trouble. 

Two possible scenarios exist at this stage. Johnson may concede for lack of time and political pressure to EU economic regulations, which would bring about no real change other than Britain’s purely symbolic independence. Regarding the Backstop negotiations, Johnson’s primary goal in withdrawal is to "allow the UK—whole and entire—to withdraw from the EU, with control of our own trade policy from the start." During the upcoming transition period, Britain’s trade relations with the EU will remain as they were before Brexit. However, in the likely scenario a trade agreement is not reached before the end of the transition period, Britain will face tariffs from the EU, which would be more stifling than the regulations pro-Brexit Britons complained of. 

Brexit is one of the most consequential decisions in recent British history, and Johnson will be up for reelection in four years. As a result, Johnson personally needs a smooth departure for Britain's economy to recover in the interim. May’s resignation serves as a dark foreshadowing of what will happen if Johnson is unable to deliver a trade deal favorable to the British people during the Transition period. Although the other option—departing the EU without a complete trade deal—is seen as cataclysmic, Johnson might accept this enormous risk for independence, jeopardizing not just Britain's economy but possibly the world’s. Regardless, the outcome of Brexit will set an important precedent for the global community given the resurgence of populism and conservatism. Britain’s success or lack thereof will answer the question posed during the 2016 Brexit referendum, which many countries are exploring now: Can Britain reassert itself as an international power and compete with international forces without the support of a supranational organization?

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