The future, post-Brexit

Recognition of the EU’s gravitational pull on ‘global Britain’—and so any rapprochement—will take many years.

The post-Brexit relationship between the United Kingdom and the European Union has been characterised by sour, suspicious competition. But can the UK maintain its resistance to full implementation of the Protocol on Ireland and Northern Ireland, concluded as part of its Withdrawal Agreement—and, longer-term, its refusal to be a ‘rule-taker’ from Brussels?

We have, after all, heard many UK threats to walk away from any agreement with the EU, only to find that decision-makers in London seemed very much to want deals. So can we take at face value warnings of unilateral decisions on the protocol, defying Brussels and indeed Washington? The comforting consensus is that the UK government may talk tough but will ultimately accept arrangements within the EU’s political comfort zone.

Analysts, especially outside the UK, envisage London making a choice on the protocol within the parameters defined by the European Commission—aligning with the EU’s rules on food for the duration or accepting its zero-risk approach to agri-food imports (occasioning the bulk of the checks). Longer-term, most expect the UK to remain within the EU’s regulatory orbit.

There is no energy or goodwill left in EU capitals anyway to rethink their structures to make rule-taking easier for a large, politically-divided former member state. Let’s call this the ‘angry Norway’ scenario for the UK.

Aggressive competitor

But it feels politically very unstable, and there are other possibilities. Many Brexit supporters still want the UK to become an aggressive regulatory competitor to the EU, taking more risks to encourage innovation and offering big incentives for inward investment—’Texas light’, perhaps.

A less coherent, but more plausible, outcome is more of the same: the UK refuses to align, taking unilateral action where it can—delaying border checks, recognising EU regulatory approvals in many areas—to mitigate the costs. It avoids a trade war but above all prioritises sovereignty. We might call this the ‘sovereignty is priceless’ option, which for now has no serious challenge in England specifically.

So how will this play out? Major UK post-Brexit choices, over a likely UK-Australia trade deal and economic recovery, give us some clues.

Core promise

Securing new trade deals was a core promise of Brexit and an early test of the government’s stomach for trade-offs. To deliver an Australia deal, the UK is offering tariff- and (in practice) quota-free access to the UK market for Australian food exporters—in the teeth of opposition from its own farmers. This sets a precedent for further trade deals London is keen to secure soon, with New Zealand, Pacific members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and perhaps Mexico.

While talking up ‘innovation’ and ‘free trade’ opportunities post-Brexit, the government insists that domestic standards will not be lowered to secure such deals. Strong campaigning lobbies, with public opinion largely behind them, explain this reticence.

Hence the sanguine attitude in Downing Street to the receding prospect of a US trade deal—amid scepticism on the part of the president, Joe Biden, as to UK commitment to the Belfast agreement. This is a caution to those who think such a deal a stick (or carrot) to deliver implementation of the protocol.

The UK is starting to feel the impact of new trade barriers with the EU in agri-food and regulated manufacturing sectors. This is likely over time to put highly-skilled jobs at risk in the formerly-Labour ‘red wall’ electoral-battleground seats in northern England which have swung towards the Conservatives in recent years. But so far there is little political fall-out for the government and no pressure to realign with EU rules.

Indeed, it suits the prime minister and Tory leader, Boris Johnson, to keep up a low-level conflict with the EU—to mobilise his Brexit electoral coalition and keep pressing on Labour’s Brexit divisions. It is working: the Labour leader and former supporter of Remain, Keir Starmer, is now silent on Europe. A stable, co-operative EU relationship is not, Johnson thinks, in his electoral interest.

Whitehall caution

There is however frustration among supporters of ‘hard’ Brexit at the heart of government with what they see as Whitehall caution over divergence. The legislative programme outlined in the queen’s speech contained only two areas framed as explicitly diverging from EU rules—on public procurement and state aids—and even there it is not clear how radical any divergence will be. The UK may also decide to allow more use of gene technology, to help the competitiveness of an agriculture sector badly hit by falling EU exports. But the repertoire of potential (de)regulatory ‘benefits of Brexit’ looks thin.

Partly in response, the appointed Brexit minister, David Frost—a champion of regulatory sovereignty—is recruiting a new Cabinet Office team to identify opportunities for divergence and to push departments to be more ambitious. If new trade deals complicate relations with the EU, that is a bonus: it signals that there will be no going back. An Australia deal would be used to vindicate Frost’s arguments against even a temporary alignment with EU food-safety rules.

Johnson’s decision on an Australia deal highlights how little the UK union weighs against delivering a particular vision of Brexit. The Scottish and Welsh governments, as well as all parties in Northern Ireland, oppose a tariff-free deal, fearing for the impact on their small farmers. The UK Internal Market Act means that Edinburgh and Cardiff are however powerless in the otherwise-devolved area of agriculture—which will play into the independence arguments of the Scottish National Party, dominant north of the border.

In Northern Ireland it will be more complicated. The protocol means its farmers effectively remain in the EU market, hence protected from tariff-free Australian competition. The impact is rather political, as the prospect of light-touch checks on the movement of agri-food goods across the Irish Sea will fade and unionists’ sense of abandonment only increase.

Trust gone

Johnson will thus pay a price to secure some Brexit ‘quick wins’ but he will not take on public opposition to ‘lowering standards’. Decisions on divergence and alignment will be shaped by UK domestic politics but the UK union will remain secondary to delivering his Brexit vision.

All this means a ‘grand bargain’ over the protocol is unlikely before the next UK election, due (other things being equal) in 2024. Concerted EU and US pressure will not substitute for the lack of domestic political incentives for Johnson to make the choice—alignment or zero-risk checks—the EU would require. Trust is almost completely gone.

What, from the EU’s perspective, can it do? It can see the protocol risks as temporary—though lasting a few years yet—and politically-driven, and work to manage them in that spirit. It can continue to keep the pressure up, in tandem with Washington, for sustainable implementation and offer sensible concessions on emotive issues such as recognition of medicines. And it can avoid the trap of over-reacting to individual UK breaches with fines sought from the European Court of Justice or tariffs. Above all, it can keep engaging.

Johnson has his own political parameters and he will not risk the UK’s trading relationship with the EU, or US support for ‘global Britain’, for the sake of British sausages. Northern Ireland Assembly elections next year will almost certainly deliver a robust majority for the protocol (assembly consent will be tested in December 2024), undermining the short-term claim as to its ‘unsustainability’. The risks to the single market are probably low—not least because of all the factors pulling against radical UK divergence from EU standards. So the EU can, and should, play a long game.

It took the UK 13 years from its first application to join the then European Economic Community. Five years after the Brexit referendum, the EU continues to define British politics and the ‘sovereignty is priceless’ option is, for now, unchallengeable. Eventually, the UK will be able to make long-term, strategic choices about its EU relationship. But that will not come before the next general election—and probably not until the one after that.