After a year of political paralysis and frustration, Britons and Europeans end 2019 with a sense of closure, if not satisfaction. By giving Boris Johnson’s Conservatives a hefty 80 seat majority, December’s general election settled one thing for certain: the UK will leave the European Union by the end of January 2020.
But the Article 50 process – working out the divorce settlement – was always supposed to be the easy bit. In 2020, talks will focus on post-Brexit trade relations, with a tight timetable and the threat of a no-deal scenario at the end of the year. Some things don’t change.
Johnson takes control
Johnson’s 80 seat majority in the House of Commons gives him unfettered control over the post-Brexit trade negotiations which are set to begin in earnest in February.
Johnson has fewer of the democratic overheads that his predecessor Theresa May had to face; he has a big majority, and the Withdrawal Agreement Bill has stripped UK lawmakers of almost all the oversight over the post-Brexit trade negotiations.
Johnson does not need their support for or, indeed, to inform UK MPs about his negotiating mandate. Nor will they be given a ‘meaningful’ vote on the outcome.
Having passed its second reading in the Commons just before Christmas, the Withdrawal Agreement bill will sail through Parliament in mid-January. The UK will, finally, be out, though an eleven-month transition period, during which the UK will remain part of the single market, will immediately begin.
With Brexit done, at least formally, the prime minister wants to remove the word ‘Brexit’ from the government’s vocabulary. The Exiting the EU department will be scrapped at the end of January. Instead, Johnson is understood to be planning a negotiating team – called “Taskforce Europe” that will be responsible for negotiations on future relations, led by his advisor David Frost.
For the moment, the canvas of a Johnson trade deal is distinctly thin on detail though he has talked about future EU-UK relations being modelled on the Comprehensive Economic and Trade Agreement (CETA) between the EU and Canada.
The Tory manifesto, and Johnson’s pronouncements that he wants the UK to diverge from EU regulation, points towards a far looser relationship with the EU than the one envisaged in the political declaration agreed by Theresa May, which talked about building on customs arrangements and held out the prospect of significant regulatory alignment on goods.
While May’s government talked of participating in a range of EU agencies and programmes, the Conservative election manifesto only mentions international science collaboration with the EU. In 2020, the UK government is likely to set up a series of new regulatory agencies to replace the existing EU ones, the clearest of hints at the direction of travel.
Negotiations end, new negotiations begin
Both sides are promising urgency. The European Commission has promised to have a negotiating mandate for post-Brexit trade relations in the hands of member states on 1 February.
Yet, eleven months to negotiate and ratify in 27 member states an ambitious trade and political partnership comparable to CETA, looks extremely optimistic.
An extension would have to be agreed by the EU and UK before July 2020. However, by amending the WAB to enshrine the December 2020 deadline in law, that option has been ruled out by Johnson, although there is little to stop him from changing his mind down the road.
That has put the spectre of a ‘no-deal’ Brexit back on the table.
In the final European Parliament plenary session of 2019, European Commission President Ursula von der Leyen warned that the tight timetable was “extremely challenging,” adding that “in case we cannot reach an agreement by the end of 2020 we will face again a cliff-edge situation.”
Reports have suggested that it could be the Commission that requests an extension to the transition period to avoid a no-deal scenario.
A bare-bones deal
With their man in 10 Downing Street, hard Brexiteers are understandably buoyant.
Brexit party leader Nigel Farage, whose party did not stand against Conservative party MPs in the December polls, believes that “for the first time we’ve potentially got the upper hand in these negotiations” though he concedes that “I know I’m not going to get everything I want.
That’s just not possible, there are going to be all sorts of compromises”.
Farage puts the probability of a no-deal Brexit happening at “25 percent – it’s no more than that.”
But not everyone is convinced that Johnson’s dominance at home will translate into greater negotiating power in Brussels.
“If you want strength in international negotiations you need to credibly be able to argue that you’re weak at home,” said Anand Menon, director of the UK in a Changing Europe, an academic think tank.
“That is to say, if you can tell your negotiating adversary that your hands are tied by your lack of a majority, or whatever else it might be, then they might be flexible with you. But if you turn up with a significant majority, everyone knows you’re in control, and therefore able to give concessions,” added Menon.
Indeed, the timetable and Johnson’s pre-election promises, coupled with sceptical remarks by the Commission’s chief negotiator, Michel Barnier, point to a ‘bare bones’ trade deal covering only tariffs and quotas between the EU and UK, which can be built on over a period of years.
The economics of Brexit
Johnson’s election win was built on the back of unprecedented Tory breakthroughs in the north of England, which had traditionally supported the Labour party but also backed Brexit.
In a bid to shore up that new-found support, the prime minister has promised massive infrastructure investment in the Midlands and the North and hinted that many government agencies and civil servants will be shifted away from London.
But that planned spending spree could be threatened by the Brexit negotiations. The UK economy grew by only 1% in 2019 and, the Bank of England warns, is possibly on the brink of a recession.
The UK in a Changing Europe estimates that even if a new free trade agreement with the EU is concluded in 2020, that would deliver an annual fiscal shortfall of between £6 billion and £20 billion, while a no-deal scenario, with UK-EU trade reverting to World Trade Organisation terms after December 2020, push that deficit as high as £28 billion.
In the short term, Johnson can, and almost certainly will, continue to blame any economic turbulence on the EU.
But having reaped the rewards of the British public’s Brexit fatigue, his government is about to start a deeply uncertain and bumpy journey. His dominance is real but fragile. Any political failures in 2020 could cause long-term and, potentially, fatal damage to his premiership.
[Edited by Zoran Radosavljevic]