As the UK and European Union resume negotiations over a trade deal, one thing is abundantly clear: even if there’s a deal, it will be a dud deal – and not much better than no-deal. This has been the suggestion from the likes of Michael Dougan and Will Hutton, and is often heard from ardent Remainers on Twitter.
The term ‘hard Brexit’ has sometimes been used for ‘no-deal’, implying any deal would be a ‘softish’ Brexit.
I doubt this: it is one thing to say that any deal will be poor and a long way short of EU membership. But it is an entirely different thing to say that a deal will not be much different from no-deal.
Any deal in prospect would certainly not be a softish Brexit.
The writing on the wall
It’s been clear since the December 2019 General Election that we are heading towards a damaging hard Brexit: we await the content of any deal that might be reached, but even with a deal there will be significant new border checks, frictionless trade will end and there will be big disruption from 1January 2021: announcements from the European Commission and the UK government on new border checks confirm this. And the new arrangements almost certainly will not be fully up-and-running by 1 January. Britain will also withdraw from many EU programmes and regulatory regimes. Many benefits of EU membership will be lost.
It is not only Johnson’s election win that ended any hope of a ‘soft’ Brexit: a true ‘soft’ Brexit was ruled out in Autumn 2016 by the then-Prime Minister, Theresa May, who decided that freedom of movement and single market membership would come to an end.
Despite all this, no-deal will surely be much more damaging than a deal.
The need for a deal
Sam Lowe of the Centre for European Reform gives five reasons why a deal will be significantly better than no-deal: tariffs and quotas will be avoided; non-trade agreements will be more likely; there’ll be better customs and cross-border cooperation; better implementation of the Northern Ireland arrangements; and a platform on which to build for the future.
Although zero tariffs/quotas are not the most important aspect of trade with the EU, they are still significant: in a no-deal scenario – and depending on the import/export tariff regime adopted within WTO rules – there will be significant price rises of manufactured goods, food and agricultural products. Export markets will also be hit, and there will be severe pressure on Britain’s manufacturing industry which, while small compared to services, is still a significant part of the economy, particularly in the ‘red wall’ areas of the Midlands and North.
Ambitions for a comprehensive trade deal are being pared back, but if an agreement is reached it is very likely to include many matters other than tariffs (see: Institute for Government Report – UK-EU future relationship – what difference would a Brexit deal make?). Examples include: simplified customs procedures; streamlined regulatory controls on food and agricultural products; mutual recognition of conformity assessments for industrial goods; and reduced checks on chemicals and medicines.
In services an agreement may include mutual recognition of professional qualifications, as well as freedom of business establishment and business mobility. Financial services ‘equivalence’ may also be part of a deal, and that would ease financial trade. In transport an agreement may mean no quantitative restrictions of road freight movement. There is also likely to be some access to EU databases for security and law enforcement.
A deal is also likely to include some kind of agreement on non-regression of labour and environmental standards. Just how this could be achieved – given the UK Government’s intransigence – is currently not clear, but there is likely to be some kind of dispute resolution system; non-regression may constrain the Government’s hopes of more deregulation.
Even the limited deal that may be in prospect, will be better for the economy than no deal. Estimates by the UK in a Changing Europe suggest that for a limited deal over ten years, GDP would be 6.4% lower than EU membership compared to 8.1% lower for no-deal.
There will also be less political acrimony if a deal is reached – though significant acrimony has built up over the past four years, and will not ease very soon. Less acrimony might slowly take the political sting out of Brexit and allow for future UK-EU negotiations in areas of common interest – though this is unlikely to happen in the short term, as the focus will be on the post-pandemic recovery. More practically, a new ‘implementation period’ – notably on customs and regulatory checks – could be agreed, which in effect might be a rebadged extension to the transition period.
The term ‘hard Brexit’ should thus be reserved for whatever deal may be negotiated – and not for ‘no-deal’. Any re-normalisation that a deal would be a ‘softish’ Brexit, should be resisted.
A no-deal Brexit should be described for what it is: not a hard Brexit, but a catastrophic Brexit that at the time of the 2016 Referendum no prominent Brexiter said would be forthcoming.
Ian Bartle is a political scientist who has held research positions at the Universities of Bath, Exeter, Sheffield and Birmingham. He is an active member of Bath for Europe