The Brexiteers are jubilant: the UK has agreed a transitional deal with the EU. For 21 months after Britain’s scheduled departure in March 2019, almost nothing will change. The UK will remain a de facto member of the single market and the customs union and continue to obey EU law. Brexit Secretary David Davis boasted that the “time-limited implementation period” (the government refuses to use the term “transition”) would provide “the certainty demanded by businesses and citizens across the European Union and United Kingdom.”
The agreement is, in some respects, a victory for Leavers. It defies those who predicted a chaotic outcome and increases the chance that Brexit, in one form or another, will happen next year. But the outcome that Leavers now hail as a success would once have been deemed a failure. Though it was the UK that voted to “take back control”, it is the EU that has.
In the distant era of 2016, Davis and other Brexiteers, such as International Trade Secretary Liam Fox, insisted that no transition at all would be needed. Britain, Leave politicians promised, would simultaneously negotiate its divorce from the EU and a new trade deal. After last year predicting a summer-long row, Brexit Secretary David Davis capitulated on the first day of the EU talks. Since then, the government has merely delayed the inevitable.
It has ended its rash threats to end security cooperation and to leave without a deal. It has accepted a £35-39bn divorce bill (a figure which Davis previously described as “made up” and for which Boris Johnson said the EU could “go whistle”), which will not be paid off until 2064. It has agreed to grant EU citizens full rights during the transition period (with European Court of Justice oversight until 2027). In the absence of an answer to the Irish Question, it has accepted a “back stop” plan of keeping Northern Ireland under EU law to avoid a hard border with the Republic. And, to the disdain of Scottish Conservatives, it has agreed to remain in the Common Fisheries Policy for the duration of the transition.
True, the EU has formally granted the UK permission to negotiate and sign trade deals with non-European countries during the transition period. But as the text states, such agreements will not “enter into force” unless “authorised by the Union”. And as Brussels has correctly calculated, the UK’s trade partners will want to study the final EU agreement before striking their own deals (which, as economists have repeatedly shown, will not compensate for restricted trade with Europe). “They [the UK] are leaving 750 international agreements,” noted chief Brexit negotiator Michel Barnier. “750! The UK has work to do to re-establish relations with all those partners.”
Yet by now, according to Davis, Britain should be on the verge of agreeing “a free trade area massively larger than the EU”. In a July 2016 ConservativeHome piece, seemingly unaware that the UK is prohibited from signing its own trade deals with non-EU members, he wrote that this could be achieved “within two years, before the negotiation with the EU is likely to be complete”.
But more than four years on from the referendum, in the summer of 2020, the UK will have no new trade deals in place. The risk is now not that the agreed transition is too long but that it is too short. Davis himself is said to have privately remarked that an interregnum of five years would be more appropriate. But the Tories are determined to break free well before the next general election (2022) and the EU has no desire to allow the UK to linger in a Brexit antechamber.
No country has ever expended such effort to leave the world’s largest single market, rather than to join it. Once Britain formally exits the EU, its weak negotiating position will become weaker still. The point at which the economic self-harm of Brexit finally becomes clear has been deferred – but it has not been averted.