Some 54 months after the UK voted to leave the EU, a deal is finally done on future trade relations between the two. The overwhelming emotion is relief; a deal, to coin a phrase, is certainly better than no deal. The return of trading terms to something akin to the days before the EU single market was born in 1993 will cause disruption. But the UK will avoid adding the chaos of no deal — a flavour of which was provided this week by the French ban on cross-Channel freight — to the economic scourge of the pandemic. This was, however, long destined to be a very thin agreement. It represents a much harder Brexit than even many Leave supporters thought they were voting for in 2016.
A deal often referred to as “Canada-style” in fact amounts to “Canada-plus”. By providing for zero tariffs and quotas on all goods, including agriculture and fish, along with some other trade facilitation measures, it goes further than other free trade pacts the EU has sealed with third parties.
But services, where the UK has a large surplus with the EU, are largely excluded. With the UK out of the single market and customs union, moreover, the new arrangements will make it harder and more expensive to trade and invest across the Channel, on both sides. It is the first free trade deal in memory that has consciously raised new barriers, rather than reduced them. Britain will begin its “independence” facing unsatisfactory frictions in the roughly half of its trade that is with the EU, especially in services.