The United Kingdom (UK), officially, left the European Union (EU) on 31 December 2020 after the transition period ended. In a year since then, Brexit remains an ‘unfinished business’ with many outstanding issues and concerns, such as food shortages, long fuel lines, supply chain crisis, shortages of truck drivers, implementation of new rules governing EU-UK trade, Northern Ireland protocol etc. These issues were further exacerbated by the severe COVID-19 waves. This paper looks at four issues – domestic, regional, foreign and trade policy - and analyses the first year of the UK outside the EU.
Brexit Timeline
In a referendum held on 23 June 2016, the UK voted to leave the EU. In March 2017, then British Prime Minister Theresa May, in a letter to then European Council President Donald Tusk, officially triggered Article 50 and began the two-year countdown to the UK formally leaving the EU. Due to the complexity of the negotiations, the timeline of exit was extended thrice (March 2019, April 2019, and October 2019)[i], with the final extension given till 31 January 2020.
The UK withdrew from the EU on 31 January 2020, which led to the beginning of a 11-month transition period. During this period, the UK followed EU rules and regulations and, remained as part of the single market and the customs union, however, without any voting rights. The transition period allowed both partners time to conclude a new trade deal. This new trade deal, called Trade and Cooperation agreement was finalised on 24 December 2020 and included new rules and regulation that would govern the UK and EU partnership. On 31 December 2020, the transition period ended and the UK officially left the EU.
Major features included, the ending of the existing freedom of movement between UK and EU – with UK nationals requiring visa for travel and stay in the EU, and vice-versa; implementation of checks and paperwork at the borders; freedom for the UK to negotiate trade deals independent of the EU; and most importantly, Northern Ireland Protocol which included provisions such as first, necessary checks and controls at points of entry on goods entering Northern Ireland; second, Northern Ireland to be subject to a limited set of EU rules related to the Single Market for goods and the Customs Union and; third, EU customs duties to apply to goods entering Northern Ireland from any other part of the United Kingdom or any other third country[ii]. Following is the timeline of key events in Brexit –
Source - https://cms.law/en/deu/insight/brexit
‘Take Back Control’ – What has been achieved?
Following are some of the key issues that the UK faced over the past year -
Domestic issues- Once the rules related to freedom of movement and cross-border travel ceased to apply from January 2021, the EU citizens no longer had the right to move to the UK to work and settle, and vice-versa. With the UK implementing a new immigration policy, the EU citizens were no longer accorded preferential treatment, with the UK government opting for a new point-based system to attract skilled workers. This was also highlighted in the Grant Thornton report of August 2021, which said that “the EU exit and resultant immigration policy has created significant uncertainty for many European workers in the sector around their future rights to live and work in the UK.”[iii] This led to shortage of labour in several sectors, most notably in the road haulage industry and food production. It was primarily due to the Brexit rules and COVID-19 pandemic that many European workers returned to their native countries from the UK, and stricter entry conditions put in place by London did not facilitate their return. The lack of drivers led to supply chain crisis resulting in gas shortages, fuel price rises and food supply worries in the UK.
Second are the regional concerns. London and Brussels have been at odds with each other over several issues. At the centre is the Northern Ireland Protocol which allows free flow of goods between Republic of Ireland (an EU member) and Northern Ireland. Under the protocol, the goods entering from rest of the UK to Northern Ireland are subject to custom checks, as it was agreed that Northern Ireland would continue to follow EU rules on product standards which is part of the EU's single market rules. The Unionists are opposed to these checks arguing that it effectively creates a trade border in the Irish Sea. Northern Ireland border has been a sensitive issue since the beginning of Brexit negotiations as the emphasis was placed on protecting the 1998 Northern Ireland peace deal (the Good Friday Agreement).
Despite signing the Protocol in 2019, the UK government is pushing for several changes in the document to include – first, getting rid of checks and paperwork between Great Britain and Northern Ireland; second, ensuring that goods that remain in Northern Ireland only need to meet British standards without complying with EU law and; third, removing the role the European Commission and the European Court of Justice had in overseeing how the protocol works. While the EU has ruled out any renegotiation of the text of Protocol, they have set out a proposal to include[iv] – first, an 80% reduction in checks on food products arriving in Northern Ireland; second, 50% reduction in paperwork to facilitate the movement of goods; third, pass legislation to allow the trade in medicines between Britain and Northern Ireland to continue; and fourth, enhanced engagement with Northern Ireland stakeholders and authorities. The talks on the Northern Ireland Protocol are expected to continue in 2022.
Apart from the Northern Ireland Protocol, another key issue that emerged was the access over the fishing waters in the English Channel, which was one of the stumbling blocks in the negotiations. Under the post-Brexit trade deal which came into force in 2021, the EU member states’ boats also need license to fish in UK and Jersey waters and vice-versa. This led to the establishment of new data exchange systems for each other's boats, as the UK was now treated as a third country for the EU. However, this requirement has resulted in many smaller boats, which lack appropriate technology, to fail to secure licenses from authorities in the UK or Jersey. The issue escalated after France issued a statement that Britain has not granted France enough licenses to operate in Britain’s water, therefore it is not upholding its part of the Trade and Cooperation Agreement in fisheries. On their part, the British have said that they had granted almost 1,700 licences for EU boats, the French dispute this figure and claim many of their boats have been unfairly denied licenses[v]. While the dispute appears to be of technical nature, it developed into a politically charged political discord between UK and France, with Paris calling for litigation proceedings[vi] against London to obtain the remainder of post-Brexit fishing licenses.
Tensions between UK and France further escalated with the drowning of 27 migrants, from Africa and West Asia, crossing the English Channel in November 2021. According to estimates, almost 25,000 migrants crossed the English Channel in 2021. The UK border force ships coordinate with France in joint operation to curb the influx of migrants. The ssituation escalated in November 2021, when France rejected UK’s offer to bolster enforcement along the English Channel with the UK Prime Minister Boris Johnson urging Paris to “take back people migrating across Channel”. He also proposed five steps in an open letter to curb migration – these included[vii] - “Joint patrols to prevent more boats from leaving French beaches; deploying more advanced technology, like sensors and radar; reciprocal maritime patrols in each other's territorial waters and airborne surveillance; deepening the work of the countries' joint intelligence cell; and immediate work on a bilateral returns agreement with France, alongside talks to establish a UK-EU returns agreement”. French President Macron called the open letter “unacceptable” and emphasising that “his country needed more responsible partners in the UK and the EU to fight illegal immigration.” The French President, during his speech to the European Parliament on 19 January 2022 at the start of France’s six-month rotating presidency of the European Council, said that “Britain's migration system favours clandestine migration and does not allow for asylum seekers to seek legal ways into the country”, therefore EU need to pursue a dialogue with London for “legal, stable routes”[viii] for migration.
Third is the idea of Global Britain and pivot to Indo-Pacific. Ever since the Brexit negotiations began, there has been debate over the foreign and security policy orientation of the country. The idea of Global Britain envisaged the UK “reinvesting in its relationships, championing the rules-based international order and demonstrating that the UK is open, outward-looking and confident on the world stage”[ix]. The UK’s Integrated Review of Security, Defence, Development and Foreign Policy, released in March 2021, laid down the contours of Global Britain. According to the document, the UK will be a “soft power superpower”[x] and would continue to take a lead role in tackling global challenges, conflict resolution, security, development and diplomacy. The government also released a command paper “Defence in a Competitive Age” in March 2021. A key outcome of both the papers was the distinctive “tilt to the Indo-Pacific region”. The papers together acknowledged that by 2030 “the geopolitical and economic centre of gravity will have shifted to the Indo-Pacific region.”[xi] It describes the region as the “centre of intensifying geopolitical competition with multiple potential flashpoints…with competition playing out in regional militarisation, maritime tensions and contest over the rules and norms linked to trade and technology.”[xii]
The UK’s Indo-Pacific tilt is based on three key factors – economic (recognising the potential of the area), values (promoting multilateralism, upholding international norms) and security (freedom of navigation, area is home to potential flashpoints like South China and East China Sea etc. and issues relating to nuclear proliferation, climate change). The UK is aiming to project its capabilities through deployment of HMS Queen Elizabeth, the British Royal Navy’s new aircraft carrier, which lead an allied task force into the region. This has been pegged as the UK’s return to ‘East of Suez’ and demonstrating “the UK’s ability to project cutting-edge military power in support of NATO and international maritime security.”[xiii] While there is scepticism regarding UK’s capabilities given it is not a Pacific Rim power and has limited assets in the Indian Ocean, it does provide opportunities to the UK to recalibrate its defence ties in the region. Another push for active presence in the region has been done through AUKUS. The Integrated Review talks about the UK’s special relationship with the United States, but its close partnership with Australia. Also, with the UK government making clear that it intends to have the “broadest and most integrated presence” of any European nation in the Indo-Pacific, AUKUS, along with the earlier mentioned UK’s decision to send an aircraft carrier to the South China Sea, makes the country more visible in the region.
Fourth in terms of economics, one of the biggest promises of Brexit was the economic independence of the country. However, the picture is rather different on the ground. Apart from the labour shortages in many business sectors, small businesses are also reeling under the impact of COVID-19, new rules of operation, increased paperwork etc. – making the economic forecast less positive. According to the Office of Budget Responsibility, leaving the EU will reduce long-term GDP by around 4%[xiv]. Goods exports were down 14% year on year basis in the third quarter of 2021, with both exports to the EU and non-EU destinations suffering. UK exports of food and drink are down £2.7bn (-15.9%) in the first three quarters of 2021 compared to pre-pandemic levels. This is largely due to a drop in sales to the EU due to new barriers to trade and the impact of the pandemic[xv]. To negate these effects and to diversify its trade relations beyond the EU, the UK has laid emphasis on boosting trade ties around the world. Britain has concluded new trade deals with Japan, Australia, finalised preliminary terms with New Zealand and is negotiating a free trade agreement with India. However, the much sought-after the trade deal with the US remains elusive and closer trade ties with China is also under question due to political tensions over Hong Kong.
Conclusion
When the UK voted to leave the EU in 2016 referendum, the idea was to “take back control” of, not only its borders, but also economy and laws. One of the key lessons that emerged from the Brexit is that re-setting of 47 years of closely integrated relations is a slow and sometimes a contentious process. The last-minute Trade and Cooperation Agreement, negotiated after months of deadlocked negotiations, allowed tariff-free, quota-free access to each other's markets for goods (and not services) and also covered future competition, fishing rights[xvi], and cooperation on matters such as security. Nonetheless, with the pandemic and change in rules and regulations for trading, the economic challenges will take time to resolve.
The UK’s exit from the EU’s Single Market and Customs Union has resulted in disruption to trade due to new border rules and regulations. But most of all, it has led to exodus of European labour which has resulted in labour shortages in many critical sectors. The EU-UK relations also continue to be under stress due to arrangement for Northern Ireland Protocol on which the post-Brexit negotiations are on-going. Tensions have remained between the UK and France over migration crossings and fisheries permits. This combination of increased friction with its largest and closest market and removal of pool of EU labour has resulted in supply chain shortages, increased inflation and disrupted trade. Similarly, Britain has made limited progress in signing trade deals, as the major deal with America is still in pipeline with US House of Representatives Speaker Nancy Pelosi, in September 2021, cautioning that there could be no post-Brexit trade deal with Washington if the Northern Ireland peace agreement was endangered.[xvii]
Even the public opinion in the UK appears to be favouring re-joining the EU. In a poll conducted in November 2021 by Savanta Comres, 53% of respondents voted to re-join the Union – including one in ten who voted to leave in 2016 Brexit. This is 4-points up from 49% in June 2021. While some of the impacts of the UK’s departure from the EU are becoming clear, however, much of the process remains to be defined. The politics of Brexit is likely to remain fraught, both around the Northern Ireland Protocol and other areas such as fisheries, migration, and trade.
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*Dr. Ankita Dutta, Research Fellow, Indian Council of World Affairs, New Delhi.
Disclaimer: Views expressed are personal.
Endnotes
[i] Brexit Timeline, House of Commons Library, https://commonslibrary.parliament.uk/research-briefings/cbp-7960/, Accessed on 10 February 2022
[ii] Protocol on Ireland and Northern Ireland, European Commission, https://ec.europa.eu/info/strategy/relations-non-eu-countries/relations-united-kingdom/eu-uk-withdrawal-agreement/protocol-ireland-and-northern-ireland_en, accessed on 10 February 2022
[iii] Grant Thornton, “Establishing the labour availability issues of the UK Food and Drink Sector”, August 2021
[iv] ‘Protocol on Ireland/Northern Ireland: Commission proposes bespoke arrangements to benefit Northern Ireland’, European Council, 13 October 2021, https://ec.europa.eu/commission/presscorner/detail/en/ip_21_5215, Accessed on 1 February 2022
[v] France24, 29 September 2021, https://www.france24.com/en/europe/20210929-jersey-grants-95-licences-to-french-trawlers-but-turns-down-75, Accessed on 1 February 2022
[vi]Politico, 23 December 2021, https://www.politico.eu/article/france-legal-action-uk-fishing-licenses-brexit-trade-deal/, Accessed on 1 February 2022
[vii] BBC, 26 November 2021, https://www.bbc.com/news/uk-59423245, Accessed on 1 February 2022
[viii]The Telegraph, 19 January 2022, https://www.telegraph.co.uk/world-news/2022/01/19/britain-eu-must-find-path-trust-says-emmanuel-macron/, Accessed on 2 February 2022
[ix]‘Global Britain: delivering on our international ambition’, Foreign Affairs, Government of UK, https://www.gov.uk/government/collections/global-britain-delivering-on-our-international-ambition, Accessed on 2 February 2022
[x] “Global Britain in a competitive age - The Integrated Review of Security, Defence, Development and Foreign Policy”, Her Majesty’s Government, March 2021, https://www.gov.uk/government/publications/global-britain-in-a-competitive-age-the-integrated-review-of-security-defence-development-and-foreign-policy, Accessed on 2 February 2022
[xi] Ibid.
[xii] Ibid.
[xiii] Ibid.
[xiv]‘Brexit analysis’, Office of Budget Responsibility, 2021, https://obr.uk/forecasts-in-depth/the-economy-forecast/brexit-analysis/#indepth, Accessed on 3 February 2022
[xv]The Guardian, 25 December 2021, https://www.theguardian.com/politics/2021/dec/25/brexit-one-year-on-so-hows-it-going, Accessed on 3 February 2022
[xvi] Fishing Rights under Trade and Cooperation Agreement include – first, mutual access to each other’s waters will be through a licensing system for fishing vessels; second, 25% overall of the existing EU quota in UK waters will be transferred to the UK over a 5 ½ year period to 30 June 2026, with specific percentages of annually agreed Total Allowable Catches (TACs) agreed for each fishing stock; third, after 2026 negotiations on access and share of stocks will take place on an annual basis. (https://commonslibrary.parliament.uk/research-briefings/cbp-9174/)
[xvii] Irish Times, 17 September 2021, https://www.irishtimes.com/news/nancy-pelosi-cautions-britain-over-northern-ireland-peace-deal-1.4676724, Accessed on 3 February 2022