Brexit Status Update. An Op-Ed for Fashion Roundtable

Relax folks, it`s almost over.

We are in the final stretches of the Brexit negotiations.  On 14th of November, the UK and the European Commission jointly published the draft Withdrawal Agreement (WA), the infamous 585 page document spelling out the terms of disengagement.  The European Council, composed of the premiers of the 27 remaining EU member states, endorsed the agreement on Sunday. 

Some of the withdrawal terms have been well known for almost a year, including the lump sum payment the UK will be making to honor its obligations towards the EU budget and other specific projects as well as citizen rights, which both parties will maintain according to existing EU regulations. On other issues such as customs, trade or the Northern Ireland (NI) border discussions were going back and forth as there were no adequate solutions.  As it stands now NI will have a closer regulatory alignment with the EU and products coming from and going to NI will use the EU`s customs code, be subject to other single market rules including product certification and phytosanitary measures.

During the transition period the UK will also remain in a customs union with the EU maintaining the current rules for goods, services and workers. It also means that during the transition period the UK will not be able to implement new free trade agreements (FTAs) with other countries as it has to abide by the EU`s tariff code.  Since FTA negotiations tend to take upwards of five years, this provision is unlikely to make any difference to the UK`s international trade aspirations.  The UK will also maintain compliance with EU competition, taxation and environmental legislation.  All this without being part of the single market and having an influence on the shaping of relevant legislations.

This WA will now have to be ratified by the UK Parliament alongside the recently published Political Declaration (PD), which sets the framework for the future relationship between the European Union and the United Kingdom.

Now, the UK Parliament will have to decide whether they want to disentangle slowly, appreciating the complexities of current economic ties or if they want to test the waters and break the bond with a swift cut, knowing that if they reject this deal, there may not be another. It is unlikely that the EU would sit back at the negotiating table.

One would hope that the inherent risks of a no-deal would be enough to make UK politicians take a tough stand and spell out publicly how important business-as-usual scenarios are to the quality of life of UK citizens and business. It`s long overdue.  

Without publicly addressing the risks of a no-deal, it will be difficult to explain to the pro-Brexit crowd why this is the best agreement the UK could get. However, difficulties are something future UK governments will have to get used to.  Whether a new EU-UK FTA will be ready by 2020 or 2022, policy making in the UK will never be the same.

The UK will have its independence amongst a crowd of heavyweight groups. From North America to South-East Asia, today`s world is dominated by trade blocks and single markets. Carving out a position amongst them that brings benefit for the UK economy will be much harder than this two-year negotiation ever was.