Passing Brexit deal would only begin another tortuous race

Lawmakers are now trying to amend Prime Minister Boris Johnson's plan, an effort that could help insulate Britain's already-stagnant economy.
Lawmakers are now trying to amend Prime Minister Boris Johnson's plan, an effort that could help insulate Britain's already-stagnant economy.PHOTO: EPA-EFE

LONDON • Should British Prime Minister Boris Johnson persuade Parliament to pass his Brexit deal - to "get Brexit done", as he promised - it would seem to bring a successful end to the most difficult chapter of his career.

However, it would signal only the beginning of another tortuous process to fully extract Britain from the European Union, one that could collapse next year in the same sort of failed divorce from the bloc that members of Parliament have tried so hard lately to avoid.

Lawmakers are now trying to amend Mr Johnson's plan to hedge against that result, an effort that could help insulate Britain's already stagnant economy but could also shatter the tenuous coalition behind the Prime Minister's Brexit deal.

The problem is that Mr Johnson's deal with Brussels, while setting the terms of Britain's departure from the EU, resolves none of the fraught questions about the country's long-term relationship with the bloc, its biggest trading partner. The government would have no more than a few months to settle those questions in a new trade agreement with Brussels, a process that typically takes years.

That means Britain could once again be staring down a catastrophic, cliff-edge split from the EU in December next year, when the Brexit transition period is to end. To avoid such a result, Britain could pay the bloc billions of euros a year to hold on to its access to the European market while it completes a long-term, negotiated divorce.

"There is honestly no way to do everything we need to do in 14 months, even with the best of intentions," said Ms Anna Jerzewska, a trade specialist who has advised the British Chambers of Commerce.

That reality has dawned on Parliament, where lawmakers have already drawn up an amendment to Mr Johnson's plan that could protect against an abrupt 2020 exit without a trade agreement by forcing a two-year extension of the transition period. But such a change could also undercut the support of hardline Brexiters and end any hopes of passing a deal now.

The threat of a no-deal departure next year has already generated enough anxiety among moderate Conservative lawmakers that they refused to go along with Mr Johnson's expedited timetable for passing his current plan, delivering the Prime Minister a defeat on Tuesday night that has put his entire Brexit deal in limbo.

Mr Philip Hammond, the Conservative former chancellor of the exchequer, called Mr Johnson's Brexit legislation a "sham", saying that "it is a camouflage to a no-deal Brexit at the end of 2020". Mr Johnson has argued in recent days that there is no risk of an abrupt departure next year because Britain will work out a new trade deal on time that includes, for example, new tariff arrangements. But experts said that was an extremely tall order.

 
 
 
 

It could take months for the EU to get a mandate from member states about its position in the talks, analysts said, and then months more to prepare for negotiations with legal studies and impact assessments.

Such negotiations are expected to be highly contentious. The Centre for European Reform said European negotiators would most likely demand that Britain commit to a "level-playing field" with the bloc in areas such as state aid, tax and social and environmental protection, effectively guaranteeing that Britain does not undercut European businesses by engaging in competitive deregulation.

The price for Britain temporarily maintaining its trading ties with the bloc beyond next year in order to avert a no-deal Brexit could be even higher than the €10 billion (S$15.2 billion) a year that it now pays into the EU's budget. Member states all make annual contributions, and the bloc could ask Britain to pay more than its member's share once it formally becomes independent.

Mr Johnson's deal could be held up by amendments, perhaps none more significant than a proposal from independent lawmaker Nick Boles that would force the government to seek a two-year extension of the transition period unless it strikes a new trade agreement or Parliament decides otherwise.

Such changes are so threatening to Mr Johnson's hopes of passage that he is considering mounting a fresh bid for an early election before he tries to push his deal through Parliament.

The fight over what happens next year is only a preview of the looming disagreements in Britain over its post-Brexit relationship with the EU, said University of Cambridge's Meredith Crowley, who is an expert in international economics. While a Labour government would most likely point a post-Brexit Britain towards a permanent Customs union, the Conservatives have promised a more complete split.

Some analysts expect that Mr Johnson will swallow the huge payouts to the EU and request a longer transition to avoid an exit next year without a trade agreement. But as long as a no-deal exit remains a possibility, analysts said, investment in Britain would continue to lag.

NYTIMES

 
A version of this article appeared in the print edition of The Straits Times on October 25, 2019, with the headline 'Passing Brexit deal would only begin another tortuous race'. Print Edition | Subscribe