Brexit Agreement – Is it a Fair Deal?

I promised in my last blog post to read all 585 pages of the proposed Brexit agreement before commenting. I got to page 365 before concluding I had got a reasonable understanding of it. The “draft” agreement is certainly one of the longest and most complex documents I have ever read. It reads like a lot of documents that come out of the EU – generally incomprehensible to the layman. Indeed, it could have been written by an EU bureaucrat – perhaps it was.

The agreement covers primarily the immediate withdrawal issues and the two-year transition period, but it actually extends many years past then in some provisions. It’s hardly a clean break from EU regulations and bureaucracy.

If you don’t wish to read the 585 pages, there is a much shorter document, only 7 pages, that is an “Outline of the political declaration setting out the framework for the future relationship between the European Union and the United Kingdom” – available on the web. This spells out that the intention is to ensure close adherence by the UK to EU policies on customs and product regulations, on state aid policies, on financial services regulations, on intellectual property rules, on transport regulations, and many other areas. The draft agreement itself also ensures compliance on such matters as state aid and environmental policies. Just one example of this is the fudge over fishing in our future territorial waters where we should have control but will not – rules on that have to be agreed with the EU.

The claim by Government Ministers is that the agreement ensures there will be no disruption in the free movement of goods, thus protecting our industries, and it will enable us to regain control of our borders and the movement of people. But in reality we will still be subject to EU regulations in many areas, and some in perpetuity it seems.

The Irish border problem and the proposed solution is a complete fudge. I respect the desire of the Irish to ensure no hard border between North and Southern Ireland – as there has not been ever since we were both part of the EU and the 1998 Agreement to promote the peace process – but the basic problem is that Northern Irish politicians wish to have their cake and eat it. They want to remain full members of the United Kingdom which all that entails in terms of no customs barriers within but some at the borders and conformance to UK regulations while retaining free movement with southern Ireland.

Even though the proposal for what is effectively a “customs union” embodied in the agreement may be attractive to business, it effectively cedes control to the EU of what goods are permitted to be traded within the UK. At least that’s the way I read it. The EU has taken great care to ensure there is no “unfair competition” from the UK after Brexit by binding us to EU rule conformance.

Let’s just take one example which is the recent GDPR regulation enacted by the EU. Under Article 71 of the agreement. The United Kingdom is binding itself to “ensure a level of protection of personal data essentially equivalent to that under Union law” in perpetuity. So the EU could invent even more daft regulations than the current GDPR ones and the UK would have to adopt them with no say in the matter.

Another example is the issue of Competition Law and State Aid. New state aid in the UK can be challenged by the EU up to 4 years after the transition period (see Article 93). Is that a trivial matter? Hardly because for example the European Court of Justice (ECJ) just issued a judgement stopping the UK from paying for power plants to stay open so as to provide emergency power when required. This was providing certainty of supply and minimising price peaks in severe weather conditions. The ECJ can also interfere in interpretation of the agreement for 8 years after the transition period (see Article 158).

In summary the withdrawal agreement is far from being a “declaration of independence” for the UK as Brexit supporters wanted. It will not enable us to set our own rules and regulations on social policies, labour regulations or environmental standards. In effect it’s a Brexit in name only.

Surely it would be much better to have cut out this bureaucracy and save a lot of the money we have promised to pay the EU under the withdrawal agreement by pushing for a clean break followed by a free trade agreement with the EU. That is what the Leave-means-leave campaign (see https://www.leavemeansleave.eu/ ) are pushing for and that makes more sense to me also than accepting this very poor deal negotiated by weak politicians. This hardly seems to be the best deal that could have been negotiated as the Prime Minister is claiming.

Postscript: After writing the above I read this morning’s Financial Times. It seems their writers agree with me in an article headlined “Accord leaves Britain bound to Brussels”. It not just points out the problems in the “transition period” but on such matters as “state aid” where it says “the UK authority must take ‘utmost account’ of commission advice on all decisions, and can be overruled by Brussels or the ECJ”. Similarly their writer Philip Stephens headlines an article with “Parliament should reject a rotten deal”. Looks like the FT journalists may have actually read the agreement also. I certainly agree with Mr Stephens.

Roger Lawson (Twitter: https://twitter.com/RogerWLawson )

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