UK-EU Brexit Agreement: Not Yet a Done Deal - Global Trade Magazine
  December 11th, 2017 | Written by

UK-EU Brexit Agreement: Not Yet a Done Deal

Sharelines

  • “Sufficient progress” was made in recent EU-UK Brexit talks.
  • EU-UK Brexit talks made strides toward an agreement, but several thorny issues remain.
  • The UK wants to stay in the EU’s single market and customs union during a two-year transition.

The headlines last week screamed of a breakthrough in the negotiations between the United Kingdom and the European Union over the UK’s exit from the EU, suggesting that it was a done deal and predicting smooth sailing from here on.

That’s not exactly accurate. The hear the participants tell it, “sufficient progress” was made in the talks, not exactly Kumbaya. The two sides did make significant strides toward an agreement in the recent round of negotiations, but several thorny issues remain.

The two sides progressed made on several fronts, including the rights of the 3.5 million EU citizens living in the UK and the 1.2 million British subjects living in the EU, how much the UK will have to pay to cover its existing financial obligations to the union, and, most difficult, the status of the border between the Republic of Ireland—part of the EU—and Northern Ireland, part of the UK.

Neither the UK nor Ireland wanted the return of a hard border between the two countries once the UK leaves the EU, and that issue was resolved with the UK pledging to follow the rules of the EU single market and customs union in the event no deal is reached. The Irish government welcomed that understanding , but the Northern Irish Democratic Unionist Party—coalition partners with Prime Minister Theresa May’s Conservative Party—was less effusive. That party wants to leave the EU on the same terms as the rest of the UK.

UK freight interests breathed a sigh of relief over the progress, especially concerning the rights of EU migrants in the UK. Those residents of the UK “are a significant part of the workforce of many of our members,” said Robert Keen, director general of the British International Freight Association (BIFA). “BIFA welcomes the fact that those EU migrants appear to have greater certainty about their future in this country and their status here.”

Despite the laudatory headlines, all sides actually acknowledged that there was no final deal and that hard work remained ahead. “We all know that breaking up is hard,” European Council President Donald Tusk was quoted as saying, “but breaking up and building a new relationship is much harder.”

The focus of the next phase of negotiations will cover the UK’s transition out of the EU and its future relationship with the union, and those talks will likely be harder than the seven months of negotiations that preceded them. The UK wants to stay in the EU’s single market and customs union during a two-year transition, but it’s unclear what price the EU will want to exact in return.

“The most pressing concern for our members,” said Keen, “has been the matter of the future trading relationship between the UK and the EU, especially Customs procedures post-Brexit.”

Another wild card is the political future of Theresa May and her minority government. May called early elections in June in a failed gambit to cement her majority in the House of Commons. There is no telling what political pressures will arise during the next phase of EU negotiations early next year, or how British politics and public opinion will respond.

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