GP Insights # 242, 1 February 2020
After three years of political turmoil, the United Kingdom left the European Union on 31 January 2020. Boris Johnson said: “The country was divided and for many, this moment they thought would never come, but it is my job to keep the country together.”
The UK enters an 11-month transition period during which it will continue to adhere to the EU rules. Its departure from the EU came after the European Parliament on 29 January approved the withdrawal resolution passed by the Westminster after a debate off mixed warm words of love and hard-headed warnings to the country.
What is the background?
The referendum in 2016 followed by the withdrawal deal of former Prime Minister Theresa May started the tumultuous ordeal for the UK to leave the European Union. Rejected three times by the British Parliament between January 2017 to March 2019, several filibusters and May’s resignation made the Brexit process unduly long. They conflicted without much hope of an agreed outcome.
Prime Minister Boris Johnson replaced Theresa May in July 2019; since then, he embarked on the mandate to ‘Get Brexit done at any cost.’ His bold moves cemented his political standing within the Tories and with a political agenda to pass the Brexit in the Westminster, Johnson became one of the few British Prime Ministers to announce on 28 August the suspension of the Parliament with the consent of the Queen.
During August-October 2019, Johnson removed the controversial backstop deal for Northern Ireland to reach a compromise with Brussels. The new Brexit deal made Northern Ireland as a border check for goods entering EU member Ireland and the UK. Northern Ireland would not only remain in the single market of the EU but also within the customs of the UK. The subsequent election in December 2019 gave the public mandate to Johnson, and on 20 December the MPs passed Johnson’s withdrawal deal paving the way for the UK to leave the EU on 31 January 2020.
What does it mean?
The post-Brexit UK will look a lot more challenging and different for the country, the European Union and the rest of the world.
First, for the United Kingdom, a post-Brexit scenario means structural and social changes. From the colour of the passport to coins, the old structure from 30 years back is set to return. The terms of the European healthcare insurance, extradition agreement within the EU countries, pension rules and the ease of travel or work will have to be renegotiated during the 11-months transition period. Also, Britain will face the question of nationalism. A split in the United Kingdom is likely to arise as Scotland’s case for independence will become harder to ignore. Simultaneously Britain’s policy to make Northern Ireland a dual border will push the cause of the Irish unification.
Second, the UK’s relations with the EU will enter a new phase of arduous negotiation over the trade deal. The UK member of the European Parliament will lose their seats after the Brexit ushering the moment when the UK progresses to leave all of the EU’s political institutions and agencies. The UK will continue to abide by the EU rules during the transition period, and the European Court of Justice will continue to have the final say over legal disputes. The discussion on trade will take centre stage for Britain. For the EU countries, especially France and Germany, demand for level playing ground of investments will dictate the trade talks with the UK. The UK will be able to start talking to countries around the world about setting new rules for buying and selling goods and services. It has not been allowed to hold formal trade negotiations with countries like the US and Australia while it remained an EU member. A question remains, how much will this independence in trade policy cost Britain.
Third, as Britain sets to renegotiate its relations with the EU, its relation with the US will look a lot more transactional as two similar patterned leaders, Johnson and Trump will begin negotiating on another trade deal between the two countries. This was evident in the manner Johnson went ahead in allowing 5G telecommunications network on 29 January in Britain evading Trump’s warnings just before the trade talks. In all likelihood, Trump is not going to cut Johnson any favours in the trade deal that Johnson would have hoped for. Similarly, the British prime minister will not be content in merely being an ally of the US.