When we started 2020 fresh with a new Brexit buzz feature, we had no idea the United Kingdom’s exit from the European Union would be forgotten in the panic of a global pandemic.
Ah, if we could only return to the good old days of “Brexit means Brexit,” and “the easiest negotiations in history.” Now, Brexit is just another stop on the road to oblivion as the UK replaces Spain as the country with the most COVID-19 deaths.
Yes, the United Kingdom left the European Union on 31 January after more than three years of wrangling and drama. But the drama has ceased as deadlines approach, including a June EU summit to assess the progress of talks, if any. June is also the final month the UK can request an extension of the transition period. (Insert Boris’s “dead in the ditch” quote here.)
• If you want a tangible example of what a no-deal Brexit could mean, look no further than the coronavirus pandemic. Should the UK fail to come to terms with the EU during this negotiating period, Britain could be locked out of Horizon Europe, the EU’s 100 billion euro research fund. Losing access to that capital would be a major blow to the UK’s ecosystem since British scientists have received more grants under the current Horizon 2020 funding program than researchers from any other EU country.
• From the beginning, Brexit was billed as a way for the UK to escape the onerous burden of EU bureaucracy and rigid rules holding England back. But as Johnson & Co. move to a no-deal final exit, British officials racing to recruit and train 50,000 customs agents who’ll be needed as the UK revives port-of-entry checks, which will generate an estimated 200 million-plus forms.
Needless to say, EU officials seized the moment to needle Brexiteers.
• Speaking of customs, Ireland is still a major sticking point between the EU and the UK. EU officials claim they have a right to be present to impose regulation and taxes at the customs checks on the Northern Ireland/Republic of Ireland border, the customs checks Boris says will never happen.
Meanwhile, officials in the republic are asking for some clarity about British goods coming in from Northern Ireland. Theoretically, there will be new customs controls on goods Northern Ireland from the rest of the UK in order to avoid checks on the border between Northern Ireland and the republic. A truck full of goods headed to a supermarket in Northern Ireland could include added expenses up to 100,000 pounds if the situation doesn’t get sorted, according to trucking industry studies.
Confused? We are, too.
• What does Stanley Johnson know that we don’t? The prime minister’s dad is applied for French citizenship, according to a new book by Stanley’s daughter – and Boris’s sister – Rachel.
We suspect he knows his son has no intentions of reaching a trade deal with the European Union and is getting out while the getting’s good. A deal is becoming more unlikely with every passing day thought the EU’s 69-year-old chief negotiator, Michel Barnier, survived coronavirus as did chief British negotiator David Frost and the prime minister himself.
Talks have never started, but that hasn’t stopped Boris Johnson from reiterating that he will never extend the 31 December deadline. So, on top of a pandemic, it’s likely Britain will have to start on 1 January negotiating individual treaties and trade agreements.
• If there is one issue that can rile up Brits, anger Americans and horrify the EU, it’s chlorinated chicken. The Americans think you can just dip a chicken carcass in chlorine and it’ll be fine. As you might suspect, the EU has these things called “standards” based on Hazard Analysis Critical Control Points, developed by NASA to keep astronauts from getting food poisoning in space. HACCP requires biological and chemical controls at each stage of production, according to a lengthy, detailed post in Wired, “How chlorinated chicken ate Britain.”
The Trump Administration is pretty firm that Brits will by-God learn to eat American chicken and like it or they can forget a trade deal. But Brits across the political spectrum are united against what they see as lowering food-safety standards.
As one American think tank researcher states in the Wired post:
America under Trump is seen as a Wild West by Europeans, and they worry that a trade deal would open the UK up to some sort of undue American influence. It’s a gut reaction – if it’s happening in America under Trump’s administration it must be bad.
• For more than three and a half years not, no one has really had a solution for the Irish border.
Under the Withdrawal Agreement Boris Johnson struck in in October, Northern Ireland will continue to follow European rules on agricultural and manufactured goods while the rest of the United Kingdom will stop following these rules on 31 December. Which means officials in NI will continue to enforce EU customs at ports. Obviously, if the UK leaves the EU without a trade deal, British goods entering Northern Ireland will have to go through customs even though they’re both part of the United Kingdom.
Though no one wants these checkpoints or the paperwork and duties they’ll entail, the rules are the rules. Now, the issue becomes, where to put them? On the border between the Republic of Ireland and Northern Ireland, or in Northern Ireland’s ports and airports?
• In feel-good terms, Brexit is a winner: “Free at last, free at last. Good God almighty, free at last.” In rational economic terms, leaving the European Union, the worlds largest, most friction-free trade bloc, makes absolutely no sense at all.
Peter S. Goodman, a New York Times reporter, visited some of England’s most successful companies and found that all thrive by selling products to customers in the EU, especially companies making high-spec auto parts and accessories. All that could end – or at least get a lot less profitable – should the Boris Johnson walk away from trade negotiations with no deal and Britain refuse to honor EU trade regs.
One of the most telling sections in “Post-Brexit, Britain Is Going Its Own Way. That Way Looks Expensive.” is when executives at an auto-parts manufacturer parrot the Brexit line, “Going forward, we should have our own destiny.”
When pressed to provide an example of an EU regulation that impedes their business, both men came up empty: “I can’t think of any,” one executive answers.
• Traveling on a British passport is about to get complicated. GOV.UK just issued a warning about passport rule changes after 31 December. In the pre-Brexit days, a British traveler had until the expiry date on their passport to go wherever in the European Union he/she wished. After 31 January, British passport holders must have at least six months of validity. And weirdly, even that might not get you into certain countries.
From the post:
If you renewed your current passport before the previous one expired, extra months may have been added to its expiry date. Any extra months on your passport over 10 years may not count towards the 6 months needed.
The rule applies to almost every country in Europe except Ireland, which falls under the Common Travel Agreement.
• More real-world implications of Brexit are starting to fall into place. Michael Gove confirmed on 11 February that customs border checks will be the new reality after 31 January. Unfortunately, Gove and other Brexiteers had campaigned on the certainty the UK would maintain a frictionless free flow of trade across borders after Brexit and that new technologies would magically scan freight.
British Retail Consortium officials immediately pointed out that no infrastructure – magical or otherwise – is in place and it’s unlikely it can be installed in the brief time left.
So, like everything from the 350 million pounds for the National Health Service per week claim on the side of the red bus to “the easiest negotiations in history,” the frictionless border trade promise turns out to be more rainbows and unicorns.
• N26 is shuttering operations in the United Kingdom. The Berlin-based digital bank will no longer have “passporting” rights to operate in the UK. Apparently N26 executives don’t think it’s worth the trouble of creating a British subsidiary. And this is emblematic of the choices facing financial institutions based outside the UK.
On 11 February, Chancellor of the Exchequer Sajid Javid and EU negotiator Michel Barnier had a little dustup over “equivalence,” the alignment of financial rules between the UK and EU. Javid drug out the old “we won’t be rule-takers” line, stating the EU should have access to EU financial markets while making up its own regulations.
Barnier replied that any treaties will have to be tied to EU rules. Sticky wicket, that.
Quartz has a fair-and-balanced post noting that while only a few thousand of the tens of thousands of people working in London’s financial hubs have left for The Continent, Wall Street banks could be forced to choose between the UK (market size 67 million) and the EU (market size 512 million) if UK/EU negotiations break down.