One year after the full implementation of Brexit – on January 1, 2021 – and, in truth, the transition is far from over. So far, a balance sheet of gains and losses can only indicate the direction of travel for the UK or the EU. But it is indicative of a rocky road that leaves little prospect for the glory days promised for a newly ‘independent’ Britain.
Even disentangling the economic damage wrought by this historic folly from that wrought by the pandemic remains problematic, a thin political cover still used by unrepentant Brexiteers. But the UK’s Office for Budget Responsibility predicts that leaving the EU will reduce long-term GDP by around 4%, compared with a drop of around 1.5% attributable to the pandemic. And in August 2021, although Britain’s total merchandise trade with the rest of the world was back to 7% below 2019 average levels, it was still 15% lower with the EU.
This is before new UK rules and controls on imports from the EU are implemented this month. These oblige importers of goods from the EU to make tedious advance customs declarations and pay the applicable customs duties.
Ireland have been given a welcome reprieve from Britain pending resolution of the dispute over the Northern Ireland Protocol, but they will ultimately be imposed regardless of what agreement is reached on the latter. At this point, the relatively favorable picture for post-Brexit Irish trade with the UK is likely to deteriorate. A report by the Institute for Economic and Social Research and the Department of Finance on post-Brexit trade records that Britain’s imports to Ireland have fallen sharply, Ireland’s exports to Britain Brittany have held up, for now, and there has been an increase in cross-border trade. There has also been a major rerouting away from the land bridge in favor of new direct shipping services to the mainland.
Promises by the Leavers that the UK would quickly be able to sign lucrative trade deals around the world have not materialized. Although he managed to hammer out deals to extend to the UK the terms of previous EU trade deals with Japan, Canada, Switzerland, Turkey and South Korea, the only entirely new trade pact is the one recently signed with Australia. Prospects for a much-vaunted deal with the US look remote as the latter has also made it clear that they will hold the UK to the terms of the Belfast deal.
The unfinished business of implementing the agreed protocol has also poisoned the divorce. It has left a soured relationship between the UK and Ireland and the EU with the threat of a trade war still looming. Britain is diminished and not improved on the world stage. Internally, Brexit contributed to destabilization in Northern Ireland, while in Scotland it fueled the cause for independence. A year later, and all this for what?