What Are the Good and Bad Deals with Brexit: Who Really Wins the UK or the EU?

The Essence of Brexit

I don’t think this whole process was adversarial. In other words, neither side set out to 'win' or to 'lose'. You join a club (the EU, in this case), belong for a number of years, and then decide you don’t want to belong any more. The club has rules about members leaving, but the rules don’t prevent you from leaving. You just have to follow the rules.

Of course, once you don’t belong to the club anymore, you can’t expect to be granted any of the club privileges. And if the club makes up new rules, you are not required to adhere to those rules. However, the new rules may harm any dealings you have had with other club members. Since a majority of Brits voted to leave the EU, I expect those voters all think they have a win. Hope that turns out to be true for them.

Potential Outcomes of Trade Agreements

A good deal could result in everyone winning. Nowhere is it written that a trade agreement has to push one party forward and the other backward. It will require humility, pragmatism, and good faith from both UK and EU negotiators. But I don’t doubt that once the blustering is over, they will buckle down and work something out.

It’s in everybody’s interests—including theirs—to do so. The ultimate goal should be mutual benefit, aligning economic policies, and fostering stronger international relationships.

The Reality of the Good and Bad Deals with Brexit

NOBODY 'Wins'

The EU and the UK will both lose. The EU, with its larger market and 27 members, will lose less than the UK, but it will not be as well off as it would have been without Brexit. The UK will and already has lost big time, as its smaller size and current UK government's lack of preparedness and strategy have not helped.

The Current State of UK Trade Policy

The biggest problem the UK faces in trade policy is that we still don’t know what we want. A team of negotiators with no known strategy or desired outcomes is a recipe for disaster. David Henig, from the UK Trade Forum, pointed out the UK's current predicament in a statement from 25 January 2020.

There are significant concerns regarding the implementation of the withdrawal agreement’s protocol on trade within the UK between the Great Britain mainland and Northern Ireland. This will undoubtedly introduce new barriers to existing cross-border trade, as has already been reported.

EU Trade Negotiating Mandate

At the same time, the EU national governments are agreeing on their collective trade negotiating mandate for the next phase of talks. Their mandate is based on consultations with their parliaments, economic interests, and overall EU objectives. The EU's approach is clear and goal-driven, contrasting with the UK's current state of confusion.

UK Government's Tariff Increases

There are reports of the UK government increasing tariffs on imports if the EU does not meet the trading demands of Boris Johnson and his ministers. However, it's unclear why this tactic is expected to work. The UK has already submitted its WTO trading schedules, which mainly replicate existing EU ones. Higher tariffs could translate into more expensive imported foodstuffs for hardworking families, which is not an economic win by any measure.

Chancellor Javid's Regulatory Autonomy Proposal

Meanwhile, Chancellor Sajid Javid MP is proposing voluntary regulatory autonomy from the EU without explaining details, meaning consequences, or implications. None of this is defined as a business success or an economic win.

Theresa May's No Deal Preference

Ironically, in January 2017, former UK Prime Minister Theresa May said her government would prefer no deal to a bad deal. Three years later, with Boris Johnson and his ministers, it appears they have not advanced much in their detailed objectives or economic reasoning.

In all, the reality of Brexit is that both the UK and the EU stand to lose, with the UK facing perhaps the greater challenge. The negotiation process must be transparent and goal-oriented to ensure a more prosperous outcome for both parties.