It has be one year in office for UK Prime Minister Boris Johnson who came to 10 Downing Street on the back of his ‘radical’ ‘Global Britain’ post-Brexit plan.
A week after leading the Conservative Party to their biggest victory since 1987, UK Prime Minister Boris Johnson unveiled an ambitious agenda promising to deliver Brexit on time and to forge ahead with a ‘radical’ domestic program he described as a “blueprint for the future of Britain”.
UK Prime Minister Boris Johnson said earlier this year that the United Kingdom would become the Superman of global trade by striking lucrative deals on its own terms after the country’s exit from the European Union. Boris Johnson’s goal of ‘Global Britain’ has hit several snags during the Brexit negotiations. The PM has faced issues over agreements with the EU, but managed to bag a major trade deal with Japan.
The Trade Deal with Japan
The UK struck its first major post-Brexit trade deal with Japan last week. This historic agreement is expected to increase trade by 15 billion pounds a year. The deal comes at a crucial time, as the UK is struggling to secure trade deals inside the EU.
Watch: UK, Japan strike first post-Brexit trade deal | Reuters
The deal is going to include data provisions that surpass the EU-Japan deal. Britain has claimed that the agreement will enable “free flow of data whilst maintaining high standards of protection for personal data.” Britain’s trade department has also said that British businesses will benefit from the tariff-free trade on 99% of exports to Japan. The deal will come into force by the end of 2020.
“This is a historic moment for the UK and Japan as our first major post-Brexit trade deal,” Liz Truss, U.K. international trade secretary, said in a statement. She added that the deal is an important strategic step towards joining the Trans-Pacific Partnership. It also places Britain at the centre of a “network of modern free trade agreements with like-minded friends and allies.”
The Japan deal is an important strategic step for the UK towards joining the Trans-Pacific Partnership.
Carolyn Fairbairn, director-general of the Confederation of British Industry, described the agreement as a “breakthrough moment” that would be “welcomed by businesses across the country.” She said, “Business will help support the Government in its efforts to secure more trade deals around the world and promote their benefits to communities. The Japan deal can be the first of many.”
Understanding the Internal Market Bill Crisis
Boris Johnson’s government has introduced an ‘Internal Market Bill’ which grants Britain the power to not have to consult the EU in state-aid cases involving the trade of goods between the EU and Northern Ireland. This is exactly the opposite of what the UK promised while signing off its divorce deal from the European Union back in January.
The bill is in violation of the EU’s ‘Withdrawal Agreement’ which states that state aid given by the British government above a certain threshold impacting trade between Northern Ireland and the rest of the EU would have to be approved by the European Commission. The bill also potentially breaks international laws and jeopardizes trade deals with the European Union and the United States. Stateside, Nancy Pelosi, the Democratic speaker of the House, said Wednesday that if the U.K. violates its international agreements, “there will be absolutely no chance of a U.S.-U.K. trade agreement passing the Congress.”
Despite this, the British government has decided to push for it even after the threat of legal action from the EU. “By putting forward this Bill, the U.K. has seriously damaged trust between the EU and the U.K. It is now up to the U.K. government to re-establish that trust,” the EU said in a statement after the meeting. The EU has given the British government an ultimatum after their meeting last week.
Michael Gove, who represented the U.K. government in that meeting, said the British Cabinet “would not be withdrawing” the new legislation plans. He added the bill doesn’t violate any previous commitments between the UK and EU. This was a precondition for Brexit talks, that the UK respects previously legislated bills with the EU before concluding any trade agreement.
The stakes for the Internal Market Bill are very high. If the bill is legislated, it can alter legally-binding Brexit agreements with Brussels and would drastically affect the UK’s relations with the EU and USA. Critics of Boris Johnson’s radical ‘Global Britain’ post-Brexit plan have said that any number of trade agreements with various countries will not make up for the loss of offset exports which will be lost to EU if the Brussels agreement is not sorted out.
The two sides are going to meet next week in the fourth round of trade talks, but an agreement seems highly unlikely in the current scenario. If both sides cannot reach an accord, the consequences could be catastrophic. An EU-UK fallout would lead to Britain losing out on the USA and EU nations as trade partners and halt Johnson’s dream of a Global Britain. The Boris Johnson government has decided to go to World Trade Organisation rules if the EU and UK cannot meet eye to eye by end of the year.