LONDON – The UK and the European Union signed a highly competitive trade deal on Thursday, settling a bitter divorce spanning more than four years and setting the terms for a post-Brexit future as close neighbors, British officials said.
The agreement, which has to be ratified by the British and European Parliaments, came together in Brussels after eleven months of negotiations and culminated in a last-minute dispute over fishing rights that only lasted until Christmas Eve a week before the end of the year.
Although the agreement is thousands of pages long, important parts of the relationship will have to be worked out later. And it won’t prevent a disruption to trade across the English Channel as UK exports continue to face some border controls, adding to costs for businesses and causing potential delays in ports.
Still, it’s a milestone in the long-running Brexit drama – the bookend for Britain’s exit from the European Union in January and a blueprint for how the two sides will coexist after breaking deep ties in a 47-year relationship. Failure to come to an agreement could have led the UK and the European Union to a bitter stalemate and poisoned relations for years to come.
If approved, the deal would enter into force on January 1, four and a half years after a narrow majority of Britons voted to leave the European Union, plunging their country into heated debates and political divisions over it.
For British Prime Minister Boris Johnson, who won a landslide election victory in 2019 and pledged to complete Brexit, the deal enables him to fulfill that promise. However, to get there, Mr Johnson had to make significant concessions, particularly in relation to rules covering state aid to businesses and fishing rights in UK waters.
By the end of that year, the UK had agreed to continue to comply with most of the European Union’s rules and regulations, while negotiators had worked out new rules for huge cross-channel trade without tariffs and quotas.
In June, Mr Johnson missed the opportunity to extend the transition period by a year, warning that Britain would be ready to leave without an agreement if Brussels did not give him enough room to develop its economy free from the influence of European rule-making. Earlier this week he insisted that Britain would “thrive” with a no-deal exit.
From the outset, Mr Johnson saw the negotiations as an opportunity to assert Britain’s sovereignty in a post-Brexit world. However, given the European Union’s much larger size and economic strength, its negotiators could inevitably insist that Britain remain in line with the bloc on some critical points.
London will subscribe to the principle of a level playing field, which is designed to prevent UK companies from gaining an unfair advantage over their European competitors through state aid or less stringent environmental or labor laws.
Despite the keen interest and the final weeks of brinkmanship, the trade talks have for the most part been conducted with less drama or visibility than the political debate that preceded them. That was partly on purpose. Mr Johnson’s administration wanted to get Brexit off the front pages to highlight its agenda for the development of the industrial north of Britain.
External events also changed the dynamics of negotiations.
The coronavirus pandemic devastated Europe, kept heads of state and government busy and pushed Brexit off their radar screens by the end of the year. This also increased the pressure to strike a deal, as neither side wanted to inflict more damage on their economies after the upheavals caused by months of lockdowns.
In the United States, Joseph R. Biden Jr.’s victory over President Trump in last month’s elections changed the calculation for Mr Johnson. Mr Trump, an avid supporter of Brexit, had promised that the United States would negotiate a lucrative trade deal with Britain after it left the European embrace.
However, Mr Biden said he viewed Brexit as a mistake and had ruled out negotiating new trade deals with a country until the United States improves its domestic competitiveness. This has robbed Mr Johnson of one of his main selling points for completing the Brexit process.
Mr Biden is also a staunch defender of Ireland and the Good Friday Agreement, the peace deal that ended decades of sectarian violence in Northern Ireland. A failed Brexit trade negotiation could have threatened that peace as it would have awakened the specter of a return to a hard border across the island of Ireland.
During the American election campaign, Mr Biden warned Mr Johnson that Britain should not undermine the deal. And since the election, British officials have been trying to show their willingness to work with the Biden administration on issues such as climate change and support for NATO.
The long road to the bare bones agreement began in 2016 when then British Prime Minister David Cameron planned a referendum on membership of the European Union to resolve decades of divisions within his Conservative Party over Britain’s integration into continental allies. Unexpectedly, voters supported the leaving.
But Mr Cameron, who wanted to stay on the block, prevented officials from working out plans for what Brexit would actually look like. That unenviable task fell to Theresa May, who took office as Prime Minister after Mr Cameron’s resignation after the shock of the vote.
For almost three years, Ms. May worked in vain to gain Parliament’s support for an agreement that would end the right of Europeans to settle and work in Britain and allow the country to enjoy the economic embrace of the UK Leaving European Union.
Their solution to the Northern Ireland riddle was to promise to negotiate a trade deal but, in the meantime, stay relatively closely linked to the European trading system to prevent the creation of a hard border in Ireland.
While this would have helped companies worried about disrupting Brexit, it would have required continuing to comply with many European rules – which was anathema to die-hard Brexiters. The opponents of Brexit were also unfazed and pushed for a second referendum to reject the result.
The result was months of angry stalemate and repeated unsuccessful votes in parliament, which only ended with the resignation of Ms. May. Mr. Johnson then won his impressive election victory.
Although Mr Johnson chose a much more distant relationship with the European Union – just about a basic trade deal – even that proved elusive even in months of frenzy, argument and brinkmanship.
Often the two sides talked past each other. For Mr Johnson and his group of Brexiteers, restoring sovereignty, escaping European economic rules and revitalizing the UK economy were the main goals.
For the European Union, defending the integrity of its internal market has been paramount. Britain’s independent instinct meant that Brussels risked giving a competitor preferential access to its market only to be undercut by a neighbor who applied less stringent standards to its exports.
While much of the talks revolved around arcane questions of state aid and dispute settlement mechanisms, they were all but sunk in the end by the politically charged, if economically marginal, issue of fishing rights.
In the UK, only 12,000 people fish with 6,000 vessels and contribute less than half a percent of the country’s gross domestic product – less than that of London’s Harrods department store. In coastal towns and villages on both sides of the English Channel, fishing is vital.
During the 2016 referendum campaign, Mr Johnson promised UK fishermen that Brexit would regain control of the country’s national waters that have been shared with French and other European fishing teams for decades, or in some cases centuries.
But fisheries are also of great importance in France, not least for President Emmanuel Macron, who is facing an election in 2022. French fleets are heavily dependent on fish caught in British waters. For example, under current quotas, 84 percent of the cod caught in a zone off the English coast is allocated to France, while only 9 percent goes to the UK.
During the difficult final days of the negotiations, European negotiators urged Britain to continue giving its fishing teams wide access to its waters.
The final days of Britain’s long divorce from the European Union were marked by haggling over something that both sides have had in common for centuries: haddock and cod.