EU, UK Set Out Conflicting Red Lines For Post-Brexit Deal

On Monday, February 3rd, the European Union’s Chief Trade Negotiator, Michel Barnier, released its goals for Brexit. They envision the United Kingdom and the European Union to be on an equal playing field in terms of trade, with no advantages to either side. The EU also seeks “non-regression” in terms of the UK’s compliance with environmental and workers’ rights regulations, and they hope that the UK will align in terms of state aid and competition. Barnier said in a speech: “In that text [of the political declaration], Boris Johnson and we … both say that we are keen to avoid any distortion of competition and any unfair competitive advantages. That is what we are talking about here. There is nothing surprising in that … I can tell you that he and his team paid attention to every word and comma in the text that commits us on both sides.” Furthermore, the EU has harkened back to Britain’s promise to continue following the EU’s standards. Official post-Brexit talks will begin at the beginning of next month, once all member states have agreed on the guidelines. 

The UK will be subject to all EU laws and regulations through 2020, if not longer—this all depends on how long it will take the UK and EU to create a holistic trade deal. Many feel that the December 31st, 2020 deadline is too early and that they will not be able to successfully create a deal in that short period. Johnson has threatened to walk away rather than agree to the EU’s plans for trade, state aid, and competition. In fact, he has said that although his preference is for the nation to not be subject to tariffs from the EU, he would prefer that to comply with their regulations, saying he prefers to have a deal with the EU similar to Australia’s. David Gauke, an MP recently expelled by the Prime Minister, said that an Australia-style deal will be effectively a “managed no-deal”. On the part of the EU, they have said that the UK can have access to their 450 million consumers as part of trade deal, but only if they abide by EU standards—”When you’re not a member of the European Union then your position is different and less favorable,” said Barnier. 

This is the culmination of three and a half years since the referendum in Britain in which they decided to leave the European Union. The vote was divisive at the time, with only a 52% majority. Johnson has said, “There is no need for a free trade agreement to involve accepting EU rules on competition policy, subsidies, social protection, the environment or anything similar, any more than the EU should be obliged to accept UK rules,” reaffirming that the UK is reluctant to comply with EU regulations. Furthermore, demonstrating the reason the UK left the deal in the first place—seeking self-governance—he said, “The choice is emphatically not deal or no deal. The question is whether we agree a trading relationship with the EU comparable to Canada’s – or more like Australia’s. In either case, I have no doubt that Britain will prosper. And of course our new relationship with our closest neighbours will range far beyond trade. We will seek a pragmatic agreement on security, protecting our citizens without trespassing on the autonomy of our respective legal systems.” 

This is a somber moment for the European Union, and an uncertain one for the rest of the world as it looks on to the imminent divide. If Johnson pulls out before there is a holistic deal, UK businesses that rely on free flow of materials through the borders may suffer, and there may be an overall rocky economic response—some predict it will be disastrous, although Johnson refuses to engage with that rhetoric. Moreover, the implications for environmental policy in the UK are not cheerful unless the EU is successful in creating a deal with protective regulations. Lastly, it is important not to forget the human impact that leaving the EU too abruptly could have. Some have warned that if Johnson leaves by the end of this year, the UK could head into a recession, with up to a ten percent decline in the pound. Hopefully, the UK and the EU will strike up a deal without either party acting as a spoiler, and there will be economic growth in the future for the UK.