Thursday’s trade deal between the European Union and the United Kingdom led to a tougher divorce than expected before the 2016 referendum. It is particularly harsh because political forces in the UK have made another kind of Brexit impossible. It is important that both the EU and the UK now ensure that cooperation is maintained in the future.
Thanks to the treaty, trade will be able to take place after January 1 without import duties. Moreover, agreements have also been concluded that allow trade in some services. However, experts on both sides of the canal agree this has an economic cost – especially for the British.
Although it has taken more than four years to reach this point since the Brexit referendum, this is not the end of negotiations between the European Union and the United Kingdom. In fact, it will likely be the beginning of a permanent negotiation situation. Because despite the fantasies of Brexit supporters that the UK can now turn its gaze from the continent to the wider world, it will remain tied to Europe.
Agreements still have to be made on certain topics – including financial regulation. The British will find it impossible to escape the danger of a huge regulatory bloc as a neighbor. For example, they will have to follow the European Union in particular when regulating the technology sector.
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In future negotiations, it will be painful once again for the British to realize that the asymmetric power relationship between the large European Union and the medium-sized United Kingdom will continue to exist. However, it is vitally important that the European Union not forget now that it needs London as a partner in the coming years. This applies doubly to countries that are geographically, economically and ideologically close to the British, such as the Netherlands.
Don’t underestimate VK
Partly because of the chaotic political situation in the UK after the referendum and the tumultuous negotiations that followed, it seemed as if people in the Netherlands and other European Union countries believed the UK was on the verge of collapse. Shortly after the referendum, Prime Minister Mark Root (VVD) stated that the country “has collapsed politically, monetarily, constitutionally and economically”, following up on that last year with a statement that it will be a “diminishing country” with “unsolvable problems”. After Brexit.
This is not an accurate representation of the situation. It falls short of the United Kingdom and runs the risk that EU member states belittle the country. With, among other things, the sixth economy in the world and an ambitious government, the UK still has a lot to offer its former EU partners.
Prime Minister Boris Johnson’s government likes to talk about “global Britain,” a largely unspecified notion that the country is moving more ambitiously into the wider world economically and diplomatically. So far, little has been given to this and the country is facing a politically difficult time: the internal political dividing lines revealed by the Brexit process will continue.
But when it comes to global challenges specifically, the UK is still largely on par with most other European countries. This applies to climate change, for example: Next year the country will organize the next climate summit. In addition, there is the same vision, among other things, to protect democracy in the world and promote sustainable economic growth, and the European Union and the United Kingdom face the economic and political consequences of the rise of China.
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The country remains one of the most powerful military powers in Europe, and with it France, it is the continent’s only nuclear power. Although it will of course remain a member of NATO, there are no specific agreements on defense cooperation with the European Union, despite the growing cooperation within the bloc in this area. However, the countries of the continent will still need the expertise of the British army and intelligence services.
Looking forward
Like the Netherlands, the UK has set its sights on the rest of the world. It attaches great importance to the effective functioning of multilateral institutions such as the World Trade Organization, the World Health Organization and the International Monetary Fund. All of these institutions need to be reformed, and the UK and the European Union have similar ideas on the subject.
However, the agreement signed on Thursday does not provide for this kind of cooperation. Indeed, the deal marks the end of the start of Brexit.
So it is important for both parties to look forward now and not lose sight of each other. Given the political sensitivities to Brexit, especially in the United Kingdom, and the interest shown by EU member states in keeping the remaining 27 together, the hardest part of the negotiations is over with the trade deal. Going forward, the European Union and member states like the Netherlands in particular will have to think carefully about how they will deal with the UK in the future. That is to say: Do not cut contact after this divorce fight, but rather continue to live together in the world as much as possible.
