What the Brexit deal means for UK-EU relations

Before the referendum, few would have predicted that this would be the economic relationship we would end up with. The economies were so integrated that most, even many prominent Leave supporters, expected a closer relationship than the free trade agreement we have. Ultimately, that is because the referendum made the EU such a hyper-politicised issue, even by UK standards, leaving little room for consensus.

The immediate reaction of many will be relief. It avoids the worst of the potential economic disruption and the rancorous political relations that would have come with no deal. We have also avoided a nightmare scenario in Northern Ireland. There will be disruption for the Northern Irish economy, but both sides can be satisfied with (and proud of) the preservation of stability. 

But any relief should be short-lived. Even though there is a deal, there will be substantial new barriers to trade between the UK and the EU (and between Great Britain and Northern Ireland for goods). The contentious issues in the negotiations - whether competition policy or fisheries - will continue to be contentious in future. The deal provides a framework for managing those conflicts, but it does not definitively resolve them. 

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Perhaps the main benefit of a deal is that it enables both sides to move out of the current phase. What is needed is a period of calm out of the glare of public scrutiny in which issues can be addressed pragmatically. The relative success of the UK-EU Joint Committee in reaching agreement on issues related to the Northern Ireland Protocol is a model to follow. 

For UK politics, most will want to move on. Even Nigel Farage has declared that "the war is over". Prior to the referendum, interest in the EU was always a niche pursuit and it will likely return to political obscurity. Most Leave voters were not "true believers" but were persuaded by arguments to do with sovereignty and control. They do not want endless conflict with the EU. There are, frankly, more important things to talk about like healthcare, regional inequality, unemployment and, of course, the future of the UK Union.

Brexit, for many in the UK who supported it, was a means to an end. Now is the time to think about those ends. For conservative eurosceptics, it provides an opportunity to diverge from the social market economy model, albeit with the risk of EU retaliation if it distorts trade. For other Leave voters, Brexit was a cry for profound political and economic change. So far, the UK government has "taken back control" for Westminster, but shown little sign of moving decision-making power to other parts of the UK. 

Now the talks are over, there will be a period of distancing from the EU on the UK side. The negotiating team will return to their departments, with little demand for EU expertise in Whitehall. The UK embassy to the EU will shrink. David Frost will move on to his new role as National Security Advisor. The UK has built up substantial EU expertise over the past four years, yet looks set to discard it, as it did following the first phase. Eventually, it will realise such expertise is still needed and that the EU is still relevant. 

Boris Johnson now has more pressing issues to face. After the health crisis, he faces an economic one. He will also have to untangle the web of contradictions inbuilt in the new Conservative electoral coalition: traditional Tories will want fiscal consolidation after the immediate Covid crisis, yet his new voters in the north of England want investment and quickly. All the while Johnson now faces a competent and relatively popular opposition leader in Keir Starmer. 

Yet even under a future Labour government, the UK is unlikely to seek a radically different relationship with the EU in the medium term. In principle, Labour might wish to form a customs union with the EU at some point. This would ease trade in sectors like manufacturing. Plus, Labour is sceptical about this government's trade agenda. Without those ambitions, the appeal of an independent trade policy may be outweighed by reducing barriers to what will remain the UK's most important market. 

However, Labour will not want Europe back on the political agenda any time soon. The Conservatives have adapted better to Brexit politics. Labour, as it has shown since Keir Starmer took over, wants the domestic debate to move, and fast, to issues such as the healthcare, education and housing. Therefore, the focus needs to be on making this agreement work as well as it can. It is likely to be the basis of relations for some time to come. 

It is also worth reflecting on what the deal says about Boris Johnson. He has often been portrayed on the EU side as ‘Britain Trump’. But for all the bombast of the last few years, he has, ultimately, made pragmatic choices and been willing to sell compromises to even the most intransigent Eurosceptics. Finally, the tail has stopped wagging the dog, although the dog by now has severe concussion. 

More broadly, there is a risk that mutual misunderstanding between the two sides worsens in the years to come. The political cultures in Westminster and Brussels (and EU capitals) will likely drift apart even further apart. Both sides will need to make systematic efforts to engage with one another at all levels: ministerial, parliamentary and official. As these negotiations have shown, the size and proximity of both means they will continue to be profoundly important to one another. 

Putting aside the myopia of recent years, both need to think more strategically about how their relationship fits into the wider global environment. Neither side has yet articulated a coherent view of how they see the other outside of the narrow bounds of these negotiations. The ongoing strategic review of overseas policy should provide that in the UK in early 2021. EU leaders in particular need to advance this thinking on behalf of the Union. 

Ultimately, the deal means substantial economic damage. Politically, relations have perhaps been managed as best as they could. For citizens and businesses on both sides, there will be significantly more hassle in future. Perhaps, there will different economic opportunities in the UK - that depends entirely on what the government does with its new-found freedoms. As it stands, however, this deal does nothing for living standards on either side; at best, it avoids calamity. After all the debate of recent years, we now know what Brexit means.