Brexit Transition in 7 Days: Boris decides that a “bad deal” is better than “no-deal” after all

The deal negotiated by the Government represents a humiliating defeat for the UK by the “Giant” that is, according to President Von der Leyen, the European Union.

In a significant defeat and ‘U-turn’ the UK Government has concluded a bad deal to end the Brexit transition period in 7 days’ time.  Worse than Norway, worse than Switzerland and Lichtenstein, worse than Turkey – and worse than Canada as far as trade in goods is concerned.

From the perspective of European Commission President, Ursula Von der Leyen: “We have finally found an agreement.  It was a long and winding road, but we have got a good deal to show for it.”  A good deal for Europe.

From the other side, here is the UK Government’s statement in full:

“Everything that the British public was promised during the 2016 referendum and in the general election last year is delivered by this deal.”

“We have taken back control of our money, borders, laws, trade and our fishing waters

“The deal is fantastic news for families and businesses in every part of the UK.

“We have signed the first free trade agreement based on zero tariffs and zero quotas that has ever been achieved with the EU.

“The deal is the biggest bilateral trade deal signed by either side, covering trade worth £668bn in 2019.

“The deal also guarantees that we are no longer in the lunar pull of the EU, we are not bound by EU rules, there is no role for the European Court of Justice and all of our key red lines about returning sovereignty have been achieved.

“It means that we will have full political and economic independence on 1st January 2021.”

“A points-based immigration system will put us in full control of who enters the UK and free movement will end.

“We have delivered this great deal for the entire United Kingdom in record time, and under extremely challenging conditions, which protects the integrity of our internal market and Northern Ireland’s place within it.

“We have got Brexit done and we can now take full advantage of the fantastic opportunities available to us as an independent trading nation, striking trade deals with other partners around the world.”

So much for the rhetoric.  Reality will prove whether the wide-eyed optimists in the Government are right.

One saving grace is that it keeps open some channels of communications and cooperation that would, indeed, have been lost in ‘no-deal’ – such as exchange of security and policing data.

Assuming that the queue of 6,000 or more trucks currently stacked in Kent and waiting to cross into Europe can be cleared – those crossing the border from 1 January will face major operational and reporting changes.  If there are any that delayed their trip to Europe – or if they end up at 23:00 GMT on 31 December stuck in a queue  system this side of the Channel – they will need to submit clearance documentation in addition to a ‘negative’ Covid test.  There is no provision in HMRC’s new regulations to avoid a fixed penalties of £300 – payable on the spot by the driver- for emergencies such as reduced capacity and increased handling times presently being experienced due to the pandemic.

In any event, HMRC has estimated the extra form filling and compliance will cost British business over £7bn – and an equal amount for those moving goods from Europe.  An additional 250,000 customs declarations will be needed in 2021.

At least a ‘zero tariff’ end to the transition avoids immediate imposition of duties up to 40% on goods moving between UK and Europe.  However, the decision of ‘if and when’ to apply tariffs in the future is for the EU to make alone.  The bloc retains the right to impose tariffs should they feel that the UK is in any way subsidising its businesses to the disadvantage of EU competitors – in other words, tilting ‘the level playing field’.

Northern Ireland, meanwhile, is confirmed as getting a new ‘customs’ border between the Province and the remainder of Great Britain.  The Withdrawal Agreement and Protocol (much of which was dedicated to maintaining a single borderless island of Ireland) agreed between Theresa May’s government and the EU stands.  The freedom for unfettered movement of people and goods between south and north Ireland has resulted in a new set of reporting and certification requirements between Ulster and Great Britain.