The Brexit Deal Unpacked
Did you miss the first installment of “Postcards from the 48%”? You can read it here.
On Nov. 13, 2018, the European Union (EU) and the United Kingdom (UK) came to a hard-fought draft agreement on a British exit from the EU — known as the “Brexit deal.”
The Brexit deal has the UK slated to exit the EU by Mar. 29, 2019 — “Brexit day.” Post-Brexit Britain continues operating within the EU rules and in the bloc’s single market until Dec. 31, 2020.
That has “Brexiteers” — those in favor of Britain leaving the EU reeling. Primarily at issue is that some pro-Brexit Conservatives are pushing for a “clean break” from the EU. Draft Brexit agreement opponents argue that continued close trade ties between the United Kingdom and the European Union maintain Britain’s status as a perceived subordinate state to the EU.
Why the EU Exists
According to its official website the goals of the European Union are:
- Promote peace, its values and the well-being of its citizens.
- Offer freedom, security and justice without internal borders.
- Sustainable development based on balanced economic growth and price stability, a highly competitive market economy with full employment and social progress, and environmental protection.
- Combat social exclusion and discrimination.
- Promote scientific and technological progress.
- Enhance economic, social and territorial cohesion and solidarity among EU countries.
- Respect its rich cultural and linguistic diversity.
- Establish an economic and monetary union whose currency is the Euro.
EU membership benefits
The benefits of EU membership to its current 28-member nations are:
- Goods, services and people can move freely among countries.
- No tariffs or duties on goods as they travel between nations.
- Public contracts are open for bid to any company within a member country.
- A standard tax code.
- Professional service practitioners such as doctors, lawyers, tourism companies and accountants can practice seamlessly in any member country.
- Science, technology, engineering and environmental protection research is shared, funded and distributed among the 28 EU members.
The UK voted for Brexit
The film “Postcards from the 48%” allowed ordinary women and men of all ages to talk about how their lives have changed since the Brexit vote.
” The Leave vote was based on so many things including a lot of lies since proven. There seems to be evidence now that Russia might be behind some of it”. Filmmaker — David Wilkinson
“No one knows”. — Wilkinson’s response when asked what was the central reason for the Brexit vote.
Britains may struggle to articulate the central reason for wanting to leave the EU but the Remainers are very vocal in opposition to Brexit. Not only in England but throughout the four countries making up the United Kingdom. Steve Bray, a private citizen from Wales is one of those thunderous voices.
Since Sept. 2017 Bray has held a daily post shouting outside the House of Commons — the elected British Parliament. He is calling on Members of Parliament (MPs) to stop Brexit.
The United Kingdom’s 48 percent
So, in order to understand the Brexit vote one must first decipher the complicated makeup of the United Kingdom itself.
First, the UK — an island nation in northwestern Europe is made up of the following countries:
- Northern Ireland
Essentially England and Wales voted to leave.
Meanwhile Scotland and Northern Ireland voted to remain — becoming the “Remainers”.
The UK as an EU member
Membership in the EU reportedly transformed the Scotland Highlands —from Helensburgh to Stonehaven.
However upon Brexit’s finalization the EU money that was used to improve infrastructure and to reinvigorate commerce in the highlands would stop. “Postcards from the 48%” vividly documents these issues.
Scotland’s fear is this.
When the EU money ends after Brexit there will be no new money coming from Westminster — the Parliament of the United Kingdom.
In Ireland there is worry around a possible reinstatement of a hard border between Northern Ireland and the Republic of Ireland. As well as a feared resurgence of “The Troubles”. The euphemistic name for the Northern Ireland conflict. The conflict in Ireland lasted from 1969 through 2001. This is the reason that no one in Britain wants to see the resumption of a divisive border.
Nevertheless Brexit vote polls show that 52 percent of the UK’s population voted to leave the EU though this is technically inaccurate.
Seventeen million out of 65 million
Out of 65 million people only 17 million actually voted.
This makes up just 37 percent of the British electorate.
In short, 48 percent either voted to remain a part of the EU, did not cast a vote or could not vote. In the film many disenfranchised Britains speak passionately about not having a voice in their own future.
Now the British exit from the EU took another step forward in the process amid continued protest. The Brexit timeline shows how the UK and EU reached this point and what is next to come.
Mar. 29, 2017: In accordance with Article 50 of the Treaty on the European Union, the United Kingdom notified the European Council of its intention to leave the EU.
Apr. 29, 2017: The European Council adopted guidelines defining the structure for Brexit negotiations.
The European Council is composed of the heads of state or head of government from each of the 28 EU countries. The EU is represented by Michael Barnier — Chief Negotiator for the 27 remaining EU countries. Barnier leads a European Commission Task Force. The “task force on article 50 negotiations” with the UK coordinates all of the legal, financial, operational and strategic issues relating to the Brexit deal.
Nov. 13, 2018: The United Kingdom and the European Union released a draft agreement on the British/EU exit.
Nov. 14, 2018: The draft agreement is approved by British Prime Minister — Theresa May’s cabinet members.
Next steps for draft Brexit deal
Now comes the really difficult work.
Dec. 10, 2018: Prime Minister announced a delay to the parliament Brexit vote. This came one day before the members of the British Parliament planned to debate for five days and then vote on the draft Brexit agreement.
Mar. 29, 2019: The European Union Parliament will vote on the Brexit agreement before Mar. 29, 2019 — Brexit day.
Mar. 29, 2019 – Dec. 31, 2020: The Brexit “transition period” is a nine-month or longer period if extensions are applied for the UK, EU and its member businesses to put new post-Brexit systems, processes and rules into place.
First, the Brexit deal’s draft agreement has to be approved by three groups before the Mar. 29, 2019, scheduled UK withdrawal from the EU.
Approving the Brexit deal
The Brexit deal is in for a difficult fight to garner approval by:
- The British Parliament.
- The European Parliament.
- The 27 remaining EU member states.
Mrs. May had this to say after obtaining her cabinet’s approval on the withdrawal deal —
“The choices before us were difficult, particularly in relation to northern Ireland backstop, but the collective decision of Cabinet was that government should agree the draft withdrawal agreement and the outline political declaration. This is a decisive step”.
May and her cabinet may have given the draft Brexit deal a green light but others in the EU and UK are unhappy with the proposed agreement.
The UK/EU Brexit deal in summary
The EU and UK “Brexit deal” or “Brexit agreement” is comprised of a 585 page document and an additional statement. The draft agreement included language which reads that the EU and UK are aiming for an —
“… Ambitious, broad deep and flexible partnership across trade and economic cooperation, law enforcement and criminal justice, foreign policy security … based on a balance of rights and obligations”.
Brexit deal’s main points – Section I
The main points of the Brexit agreement are also the most open to debate. They are:
During the Brexit transition period March 2019, through December 2020, people will enjoy “visa-free travel” between the UK and the EU. And they will have the same rights and guarantees they have today.
In addition UK and EU citizens living in Britain or in an EU member country will retain social security and residency rights after Brexit.
However British citizens with residency in the EU may not be able to move to a different country within the European Union in the future.
Also, it is unclear if professional qualifications like medical and legal board certifications and university admissions access within EU countries will continue to be honored with the same conditions for citizens of the UK after the transition period.
Unless another agreement is reached before then the “Irish border backstop” temporarily prevents a hard border between Ireland and the Republic of Ireland (Northern Ireland) until December 2020. The Brexit deal supports a single customs territory for the free flow of people and most goods and services between Ireland, the Republic of Ireland and the rest of the UK.
The Ireland/Northern Ireland agreement was the most difficult to negotiate according to reports from the EU.
Brexiteers are angry about this part of the agreement too. Essentially the Irish border backstop prevents the UK from reaching any trade agreement with countries outside of the EU if such an agreement included removing tariffs on goods.
Brexit deal’s main points – Section II
The UK must adopt a “level playing field” agreement on business competition and state aid to prevent UK business from underbidding EU businesses. There are “non-regression clauses” which state that the UK can not bring back social, labor or environmental laws that are lower than the EU’s. Wage minimums would be a labor standard that could not be set back to its previous level under the draft Brexit agreement.
A level playing field would also require the UK to enact EU regulations on state aid which mirrors the EU. And it calls for making laws out of three current EU directives:
- Continued exchange of tax information between the EU and UK.
- Ongoing investment firm reporting.
- EU code of conduct on taxation.
The future trade agreement and maintaining close relationships in the areas of business services and within business sectors such as transportation is an important Brexit goal. The objective is to “build on the single customs territory provided for in the withdrawal agreement” — according to the draft Brexit document.
The “fisheries” agreement calls for the UK to allow EU fishing companies to continue operating in British waters tariff and quota-free in theory. But there is some unclear language that leaves EU fisheries uncertain about its access to fish in British waters. The UK would have open access to EU fishing markets however.
So far Scotland’s “fisherman’s Federation” is displeased with the terms of the Brexit deal saying it falls:
“Far short of an acceptable deal”.
Brexiteers have been calling for the British government to “take back control of our laws” and British fishing waters. To Brexiteers the draft agreement fails to restore British waters to UK control. In response to this outcry from Brexiteers on the fisheries agreement spokesperson for British Prime Minister — Theresa May said:
“We’ll be negotiating as an independent coastal state and we’ll decide who can access our waters and on what terms in 2020”.
Brexit deal’s main points – Section III
“Governance” under the Brexit deal’s transition is handled by a joint EU/UK committee whose mutual consent decisions would be binding. There will be a five-member arbitration panel convened to handle disputes. The panel would not be able to vote on EU law. Instead that would go back to the committee for a vote.
After leaving the EU Britain would have a level of access to the EU’s “financial markets” that is similar to the access granted to Japan and the United States — known as “equivalence”.
The draft Brexit agreement moves Britain one step closer to leaving the EU. And it seems both Brexiteers and Remainers are equally dissatisfied with the Brexit deal. In part three of “Postcards from the 48%” we will examine the Brexit deal’s impact on the United Kingdom, the European Union and the global markets.