How to Understand Brexit Deal

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At eleven o’clock – says the actor – the play is over”. These words by Bismarck were popularized by the book by Stanisław Cat-Mackiewicz, and now they perfectly illustrate the result of the Brexit negotiations. Politicians using bluff and masquerade have been unmasked, and leaving the EU turns out to be a humiliation for Britain, not a triumph.

Promises of a quick and favorable divorce from the EU for Great Britain – what a surprise – did not work out. Two and a half years after the referendum, only a “provisional agreement” was negotiated, which is to be in force until the final trade agreement is negotiated. This may take up to several years, although both sides declare that they will manage to do it in the next two years.

What will the relations between Great Britain and the Union look like at the time?

1. There will be a customs union

A temporary customs union is established between the EU and the United Kingdom. The rules of mutual relations are regulated by a large, almost 600-page agreement, and the arbitration court is to decide on conflicts. In matters directly related to the European law, and there are many in the contract, the arbitration court must appeal to the EU Court of Justice (CJEU).

The customs union means that the United Kingdom cannot establish separate trade agreements with third countries, it must apply EU tariffs and customs regulations. And yet one of the main arguments of Brexit supporters was the prospect of signing bilateral trade agreements with the US or China on more favorable terms.

It won’t happen. The United Kingdom will have to adapt to EU rules in this area, without any real impact on their shape.

2. There will be a special status of Northern Ireland

Northern Ireland stays in the common market, based on special provisions of the so-called “Irish protocol”. As a rule, all rules of the single market as well as the rulings of the CJEU will apply in its area. Goods from N. Ireland will be marked “UK(NI)”, thanks to which they will have free access to the markets of EU countries.

Goods bearing the UK designation will be inspected before entering Northern Ireland by the British services, but supervised by Brussels. In fact, it divides the country into two parts, with different legal regimes. It seems that it will be very difficult to accept by the unionists, because it can be seen as a step towards the break-up of the country.

3. There will be great uncertainty

The possible entry into force of the agreement will calm down some entrepreneurs, but it will not eliminate uncertainty. In the key issue for the British economy, which is the access to the EU financial services market, the text of the treaty provides little. The City of London, which is the European financial center, got a vague assurance of mutual recognition of regulations.

Brussels, however, has the option of unilaterally withdrawing recognition, only communicating it thirty days in advance. Banks and other companies from the financial sector will therefore continue the process of moving their activities, and thus jobs, to the Old Continent.

The agreement is of “lose-lose” nature. Certainly, it does not please anyone in Brussels, which enters into a complex system of links with the former member state. Losses for London are, however, much bigger. Half of the kingdom to the one who will show what are the benefits for the UK from a new relationship status with the Union, compared to membership.

Instead of the promised savings, it turns out that they have to pay EUR 40 billion to the UE. Instead of the expected “sovereignty” there will be probably a long-term attachment in form of the customs union. Instead of strengthening the state, there is dividing it with a special border in the Irish Sea.

The Brexit Deal is in this form theoretically unacceptable to any of the British political camps. However, it does not seem that the change in the agreement negotiated with such difficulty is possible.

The British parliament now has little room for maneuver. An alternative to the proposal adopted by the Theresa May’s government is a disaster (which will result in a lack of agreement), new elections or a second referendum. The game is over, the time for making a decision has come.


The original article was published in Polish at: https://liberte.pl/jak-rozumiec-brexitdeal/


Translated by Marek Lewoc

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