After four and a half years of uncertainty, fraught negotiations, and missed deadlines, the U.K. has officially reached a trading agreement with the European Union, after voting to leave the bloc in June 2016.
The Christmas Eve deal was announced mid-afternoon in London, after the two sides reached agreement on final major sticking points on fishing rights for European vessels in U.K. waters; other long-running sticking points were competition for British businesses in the EU, and trading regulations for electric cars.
While the final concessions ultimately appeared to have come from the U.K.’s side, the deal crucially preserves tariff-free trade between the bloc and Britain. The deal must still be ratified by the U.K.’s Parliament, likely next week, and then by the European Parliament, in the new year.
The deal successful avoids the risk of a so-called “no deal” Brexit on January 1st, where a lack of trade agreements mean the U.K. would fall back on standard WTO trading standards. The prospect of such a fall-out—which had been a looming prospect for years—raised the possibility of a sudden stop or delays to daily trading across the border into France that could even imperil supplies of fresh food and medicines.
The chaos such a stoppage might cause was made painfully evident over the last week, after France closed the border to the U.K. over a mutation in the COVID-19 virus in southeast England, resulting in days of trucking delays and causing worries over a shortage of Christmas food imported from continental Europe. As of Thursday, delays were still ongoing as truck drivers waited for COVID-19 tests.
There is still plenty of uncertainty, however, on the U.K.’s future, and the deal is not expected to lay out in detail how financial services will be managed: a major concern, given the British economy’s dependence on the banking sector in London.
This round of trade negotiations had lasted nine months, occurring alongside the chaos of the COVID-19 pandemic, which has often distracted the British public and European governments from the grind of mapping out how a post-Brexit relationship will look.
But few, least of all British Prime Minister Boris Johnson, who had been a major advocated for the country break from the EU, expected the divorce to be quite as complex, messy and long-running as it has turned out to be. While the announcement of a deal has caused sighs of relief, the process has already taken a toll: by late 2019, before the pandemic and already more than three and a half years after the vote, businesses described to Fortune the impact of the uncertainty: lost business, fluctuating messaging, and changes in how and where they invest.
European businesses, too, have had years of grappling with preparations for a post-Brexit relationships that has been extremely thin on details.
A very British split
When the news arrived that Britain had voted to leave the EU arrived on the morning of June 24, 2016—a surprise result that shocked pollsters, pundits and even, seemingly, the government that had hosted the referendum—it was the sign that political winds were shifting globally. Arriving just months before the election of U.S. President Donald Trump was elected later that year, the referendum result was a shocking rebuke to the country’s ruling political elites and their ability to read the mood of the country.
The outcome was deeply symbolic domestically, too. The lead up to the vote itself had played out with a heavy emphasis on themes of Britishness, immigration, sovereignty and identity, that stands in deep contrast to the technocratic wrangling that would follow in the years afterwards. And the vote sharply split along lines of age, region, wealth, and political leaning, as well as within the U.K.’s four nations: England versus Scotland; the younger generation versus older Britains; the wealthy south versus the post-industrial North.
The results of the vote also furthered splintered the country’s political landscape, fracturing the ruling Conservative party into those who wished to stay in the EU, and those who wished to remain. Theresa May, the former prime minister who led years of punishing negotiations until summer 2019, was herself in favor of remaining in the EU, before the task fell to her to engineer a divorce; Johnson, who ultimately rose to the top post on his pledge to finally “Get Brexit Done”, found the negotiations no easier despite his support for separation. His pledge—now finally completed—helped him win a general election last December, turning the traditionally Labour north of England Conservative, a historic shift.
But while the Brexit saga has produced plenty of drama—fears of last-minute splits; political oustings; lying to the Queen; and worries that it could once again inflame tensions of Northern Ireland—the last four years have also often pitched between absurdity (an ill-advised coin, designed to mark the “official” day of the split on January 31), and the drudgery of hammering out an agreement in which Britain had little leverage to dictate terms or demand concessions.
Throughout the talks, Johnson and other Brexit hardliners insisted that “no deal” was better than “a bad deal.” In the end, Britain got “a fair deal,” one that reflects the highly unequal power dynamics between an island nation of 67 million people and a large Continent with 448 million. Whether it’s good or a bad deal, only time will tell.
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