What the Brexit Deal Means for UK’s Sovereignty, Immigration, and Fisheries

In the final days of 2020, the Johnson government has finally agreed to a Brexit trade deal with the EU. Both the Prime Minister and President of the European Commission Ursula von der Leyen gave speeches expressing their happiness with the final form of the agreement. The deal provides for a tariff- and quota-free trade between the two parties. Its more than 1200 pages spell out further the details of the UK/EU relationship from this Friday on.

In the foreword to the summary of the deal, Johnson says that ‘this ambitious Agreement … is the first the EU has ever reached allowing zero tariffs and zero quotas.’ Despite these arrangements, however, cross-border businesses will be subject to new customs duties and paperwork after the UK’s exit from the EU’s customs union.

The significant points of contention in the deal and important issues for the UK public include the UK’s sovereignty from the EU and EU jurisdiction, a free hand on immigration policies, and the question of fisheries. On two of these, the deal represents a somewhat significant change from the status quo. On fisheries, however, the change often presented as far-reaching is, in fact, of very little significance (although with potential for additional changes in the future).

An important achievement for Johnson on the sovereignty front is for the deal to be based on international law, with independent arbitration mechanisms being laid out in cases of disputes in the future instead of being under the jurisdiction of the European Court of Justice (ECJ). From a wider legal point of view, this arrangement makes much more sense, as it prevents the EU as an overarching institution from being a judge in its own affairs. The ECJ performs the function of a supreme court for EU law, so a trade deal with it as the dispute resolution mechanism of choice would have made it more part of EU law than general international law - putting the UK in a still somewhat-subordinate position vis-à-vis the EU. A ‘Partnership Council’ is set up by the deal to ‘supervise the operation of the Agreement at a political level, providing strategic direction.’

While no involvement by the ECJ was negotiated, the EU and the UK still agreed on arbitration available if one party believes they are being damaged by measures taken by the other Party in subsidy policy, labour and social policy, or climate and environment policy. In theory, these provisions can have both pro-competitive and anti-competitive character when it comes to states’ repressive legislation. For example, it has the potential to prevent more restrictive legislation from being enacted on labour markets. However, amid the political will and policy tendencies of the day, challenging such developments could prove to be politically impossible regardless of its legality. This would make the positive potential of these provisions moot. On the other hand, they could prove to be a formidable obstacle if, in the future, the UK were to aim to, for example, liberalise its labour markets - easing some of its restrictions instead.

This is more explicitly tied to the ‘non-regression’ clauses regarding labour, social, and environment and climate standards included in the agreement. Both the EU and the UK have agreed not to loosen their grip on these parts of their respective societies and economies. This sends a strong signal that the parties aim to prevent the positive potential of the clauses about arbitration for damages incurred by the other’s policies to be actualized. Disputes regarding ‘non-regression’ in these industries will be resolved through a ‘Panel of Experts’, the recommendations of which will be non-binding. Nevertheless, the social power of these recommendations might still be very significant in affecting outcomes.

Although the EU and the UK will cooperate on the issues of tax evasion and legislation against money laundering, the new deal does not affect tax rates in any of the two parties’ territories. According to the summary, ‘there are no provisions constraining our domestic tax regime or tax rates.’ Such an explicit proclamation indicates that this aspect of the parties’ economies could have the potential to become a competitive battleground with positive effects on the consumers and the public.

Regarding immigration, the UK will regain full power to make its own policies deciding who will be granted long-term stay permissions, ending the leaving the free movement area of the EU. In line with other free trade agreements, the UK/EU deal introduces short-term stay for business visitors for 90 days out of each 180-day period. The two parties have also agreed on many more specific arrangements for foreign workers and employees. An example of this is the mutual recognition of professional qualifications, where the EU and the UK will accept each other’s occupational licenses. 

The sticking point for the UK has been little-restricted immigration of nationals of European Union states that sometimes have much lower standards on obtaining citizenship or settlement status. The Prime Minister announced that the UK will have a ‘new immigration policy - ensuring that the brightest and best global talent can come to the UK for business purposes’. This is expected to be realized through an Australian-style points-based immigration system. 

Visa-free travel has been established for short-term visits, but this remains at each party’s discretion. It is common, however, that Western states have visa-free travel arrangements with most of the world. Introducing visa requirements between the UK and the EU would thus be highly unusual.

One issue tied to immigration in the Brexit debate has been the welfare state and healthcare systems. The EU and the UK have agreed on the provision of social support and healthcare services to each other’s citizens in many circumstances, including tourism and work-related stays. People ‘will be entitled to reciprocal healthcare’ to be covered by tax or insurance payments of that person’s country of origin. This might prove to be a controversial part of the agreement, as it allows for the provision of UK social services to those accepted into different countries’ systems under different conditions.

Finally, the issue of fisheries has been perhaps the most hotly debated in the recent past in the UK. Representing a traditional and culturally important part of the UK economy, calls have been made for UK fishers to gain full access to the UK’s fish stock. A transition period of five years has been agreed to, during which the EU’s access to UK fish is going to be reduced. 

However, these reductions are not especially significant. Under current arrangements, the UK has rights to 50% of the total volume that is allowed to be fished every year. The EU is next at 33.3%. The rest is apportioned according to other trade deals. Over the five-year transition period, 25% of the EU’s share is going to be transferred to the UK. After five years, therefore, the UK will have rights to 58.3% of the fish in its waters, with the EU coming in at 25%. While this part of the agreement could be revoked at any time, with the UK reclaiming 100% of its fish, this would likely provoke a backlash by the EU, who could take similar measures with negative consequences on British fishers instead.

The fishing issue is more likely about the UK’s national sovereignty than economic gains. This is evidenced by its relative economic insignificance within the whole deal. According to the deal summary, over the transition period, the UK is projected to gain £146 million from the new arrangements. However, the overall agreement covers roughly £670 billion in trade each year. This means the issue of fisheries only represents about 0.004% of the deal in monetary terms. Considering this fact, it is even more significant that only a 7.5% increase in the control over the UK’s fish has been achieved by Johnson, as few would consider this a large step towards sovereignty.

Apart from these points, the more than 1200-page agreement includes provisions regarding, for example, cooperation on crime and law enforcement, participation in EU’s research and scientific programmes, provisions to allow business in services and investment to continue across the border, intellectual property provisions, procurement rules, and many others. The sheer volume of the deal only accentuates the broader issue today’s states face. With its current enormous size and extensive involvement in the economy, the regulatory state makes it ever more cumbersome to craft deals which provide for the removal of trade barriers internationally but also navigate though differing requirements at the domestic level. At some point, this is impossible to achieve with any semblance of brevity.