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Analysis

5 reasons PM’s plan is bad for Britain even if EU agreed

by Hugo Dixon | 03.10.2019

Lots has been written about why the EU will reject Boris Johnson’s cockamamie Brexit scheme. But even if they said “yes”, it would be bad for the UK. It’s worth seeing why because some elements of the Prime Minister’s proposals may find their way into a future deal. There are five big things wrong with them from a UK perspective.

Cliff edge end 2020

Johnson wants us to quit the EU at the end of the month and then go into a transition period until the end of next year, during which nothing much changes apart from the fact that we will lose our EU voting rights. 

The Prime Minister hopes that a new free-trade agreement (FTA) with the EU will kick in immediately after that. But that’s hopelessly optimistic. Ambitious FTAs typically take over five years to agree.

So much the most likely scenario is that we would trade with the EU under World Trade Organisation (WTO) terms from January 2021 – just over a year from now. Some Brexiters like to pretend that this would be just fine, but it wouldn’t. We would face tariffs on exports to the EU. Customs controls would gum up our manufacturers’ just-in-time supply chains. And many of our world-beating services industries, such as finance, would lose their rights to operate in the EU.

Our economy would fall off a cliff because the EU accounts for roughly half our entire trade. The outcome might not be quite as bad as crashing out in acrimony without a deal. But it would still be awful.

Canada? You must be joking!

Brexiters say they will eventually be able to negotiate an FTA with the EU like the one Canada has. Although this isn’t nearly as good as the current deal we have, it is among the most ambitious FTAs in the world. 

But there’s no way the EU will agree to such a deal with the UK given that Johnson wants to abandon the “level playing” provisions Theresa May negotiated. She said the government wouldn’t cut social, environmental, consumer and competition protections to give our manufacturers an unfair advantage vis-a-vis EU producers.

With Johnson saying he won’t make a similar guarantee, the EU won’t agree an FTA like the Canada one even after five years. The UK is just too big a market and too close geographically for it to take the risk. The best we could hope for is a bare-bones FTA. The EU may not even agree to cut tariffs – and, if it concludes that we are unfairly subsidising our industries, it may even impose extra tariffs as punishment.

Back-door to our market via Ireland

Johnson is proposing no regulatory checks on goods entering Northern Ireland from the Republic of Ireland (See 10a of his paper). He is also proposing that Northern Ireland manufacturers have unfettered access to Great Britain (see section 11). As a result, there will be little to stop goods coming from the EU into Northern Ireland and then crossing the Irish Sea into Great Britain.

The Prime Minister says there will be new customs checks in Ireland but not at the border between Northern Ireland and the Republic. But few people believe these will be watertight. And even if they work, it seems they will only deal with tariffs.

Given that EU producers will have backdoor access into the UK, the bloc will have less incentive to do a FTA with us that opens up their market to us. Producers from other countries which have deals with the EU will be able to ship their products into our market by the backdoor too, so they won’t be terribly keen to do FTAs with us either. All that talk about global Britain doing buccaneering deals around the world may come to little.

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Strife in Northern Ireland

The imposition of customs checks in Northern Ireland will put the hard-won peace there at risk. Johnson seems to think that this won’t be the case because the checks won’t actually be at the border. They will be at “designated locations” elsewhere. But paramilitary forces might target those locations.

Brexternity

The Prime Minister says we should “get Brexit done“. But his proposal means that the agony will go on and on. The only way to put this bawling baby to bed is to stop Brexit. And the best way to do that is to have a referendum asking the people if they still want it.

Edited by Rachel Franklin

Categories: Uncategorised

4 Responses to “5 reasons PM’s plan is bad for Britain even if EU agreed”

  • Well, I’m sure he’ll find enough Brits who are sick enough of how Brexit developed (well, developed) and who will support this infantile scheme just to get rid of the whole idiocy. What a sad future to look forward to.

  • No kind of Brexit is acceptable. Let us concentrate on how we can prosper and develop as continuing members of the EU.
    Resist the propaganda that assumes everything changes at the end of the month. Ignore the increasing number of articles that take this as given.
    Believe we are continuing as members, and perhaps it will be so.

  • This new deal is half baked and it will not get through the EU. They will not leave the Republic in the lurch and from news reports the business community on both sides of the border are hostile. If anything threatens the open border there is a huge risk of trouble. Guy Verhofstadt and the Eur Parl are openly hostile and Barnier is against it.
    I am not sure why the new deal satisfies the ERG but the DUP look as if they have been bribed with cash. I think we can win but the opposition parties must stick together and not pursue narrow party fuelled objectives.
    I hope there is a huge turn out for the march on 19 Oct . We need to keep fighting these reckless maniacs. What an unbelievable farce.

  • One of the more ridiculous features of the p!an is that the future of part of an international trade agreement is to eventually be decided by a (currently non-existent) provincial government. Is there anything like that in the annals of international relations? Surely if a junior Foreign Office official had suggested that they would have received an ‘F’ in Diplomacy 101.