This week some magic beans have been spread (apparently) across London and Brussels making both sides to come to an agreement regarding the Brexit deal. Not so easy though! See below the main Brexit insights that sparked the week.
UK and EU agree a new deal
A revised Brexit deal has been agreed between the UK and the EU replacing the controversial Irish backstop plan in Theresa May’s deal. Much of the rest of the deal remains the same as Theresa May’s deal, including the whole of the UK leaving the EU customs union. Northern Ireland, however, would have to keep to the rules of the EU’s single market, rather than UK rules, but because Northern Ireland will be set apart from the rest of the UK when it comes to customs and other EU rules, the deal gives its Assembly a vote on these provisions.
Leo Varadkar on the new deal
The Irish PM Leo Varadkar has shown hope that the new provisions regarding the Northern Ireland will work well, carrying a theoretical risk only of a hard Irish border sometime in the future. Varadkar is considered to be a turning point in Brexit negotiations due to his strong stance on the Northern Ireland matter which to his surprise, EU leaders showed great support and solidarity during all this time.
“If this agreement is ratified and implemented, the Queen will still be the Queen, the pound will still be the pound – Northern Ireland will still be part of the UK”, Varadkar concluded.
What could happen now
If MPs vote in favour of the deal, the UK will leave the European Union on 31st October. If MPs reject his plans, legislation passed by MPs says he must ask the EU for an extension until 31st January 2020 – something he has repeatedly insisted he would not do. Cabinet ministers have said the government will obey the law, but the Prime Minister has said he will not ask for an extension.
Additionally, there is no guarantee that the other EU countries will agree to his request for an extension. The President of the European Commission, Jean Claude Junker stated that the EU will not offer another extension to the UK in case this deal does not pass the House of Commons. At the same time, the European Council President, Donald Tusk said that he has no idea what would happen in the House of Commons.
Indeed, what would happen?
MPs vote on Saturday
Whilst the Prime Minister has agreed a deal with the EU, he has not agreed a deal with MPs. MPs will sit in the House of Commons on a Saturday, 19th August for the first time since the Falklands War, and this will be Johnson’s last chance to get Parliament to approve a deal before the Brexit deadline of 31st October. Johnson has insisted that he is very confident that MPs will back his deal, but the Democratic Unionist Party’s opposition to his plans means he faces a battle to get the agreement through Parliament. The Prime Minister is expected to focus his attention on Labour MPs in Leave-voting areas, a group of Tory Brexiteers, and rebels he expelled from the Party.
In a statement shared by the Labour leader Jeremy Corbyn responding to the revised agreement, he stated that these proposals “risk triggering a race to the bottom on rights and protections: putting food safety at risk, cutting environmental standards and workers’ rights, and opening up our NHS to a takeover by US private corporations.” Corbyn concluded that the best way to get Brexit sorted is to give the people the final say in a public vote”.
The Liberal Democrats stated that the new deal is a disaster, stating that “there is no deal as good as the one we have, as a member of the EU.”
Fingers crossed, BoJo!
Let’s talk about trade
A trade agreement modelled after the so-called ‘Canada-style deal’ seems to be the UK government’s direction for its future relationship with the EU.
Setting its own tariff rates after leaving the EU Customs Union seems to be the biggest advantage the UK government would go for. In case the UK manages to exit the EU on 31st October, there is a transition period until December 2020, which means that there is not that much time to prepare for the new trade deal, if achieved. And we talk here about documentation aka bureaucracy.
This Monday the European Commission released new data on Implementation of Free Trade Agreements which shows how other countries (such as Canada) are dealing under the Free Agreement with the EU. The main hurdle being the costs and paperwork that companies new to provide when trading specific products such as cheese.
In 2018 the EU accounted for 46% of UK exports.
