Two weeks ago the prime minister said no-deal would be wonderful. It really wouldn’t have been. There is huge relief among businesses that the major disruption that no-deal would have caused has been avoided. There will be zero tariffs and zero quotas on most trade in goods. Manufacturers are delighted. Nissan has confirmed it will be staying in Sunderland - it had suggested it would close the car factory there if we’d left the EU without a trade agreement. But note: PSA is not committing to its Vauxhall factory at Ellesmere Port. It wants to see the details before deciding its next move.
It is concerned about the new “Rules Of Origin” tests. Tariff-free access to EU markets is all well and good but Vauxhall isn’t sure its cars will qualify.
This deal does very little for services - the bulk of our economy - financial services in particular. Banks and insurers will no longer be able to serve their EU based customers from the UK, but then they have known that for some time. There’s no blow in this deal that they weren’t expecting. Universities face financial hit. The UK is leaving the Erasmus programme, foreign exchange students useful source revenue. Nurses, doctors, accountants, engineered and architects will be concerned to hear that the EU is only offering limited mutual recognition of their professional qualifications. Those who are already working for EU customers appear fine. Those who don’t and hope to in future may find they have to take additional exams.
The big anxiety I’m picking up is about disruption at border. From 1st January the paperwork begins. Exports and imports will require customs declarations and checks and many companies are not prepared. The UK has pledged to wave freight through at the border for the first six months, the EU has not and will presumably enforce the rules from Day 1.
The chief executive of the Road Haulage Association told ITV News: “Disruption from 4th January is inevitable because businesses are not ready for the customs processes and they are not being given an implementation period. There will be chaos of the sort we saw in Kent this week”.
In summary, this trade deal reduces but will not eliminate the economic damage that leaving the EU’s single market and its customs union will cause. “Non-tariff barriers” will go up, despite the prime minister’s insistence to the contrary, this will make trade with our closest and most important market, more difficult. Even the government’s economic forecaster - The Office For Budget Responsibility - calculates that leaving the EU with a free-trade agreement will make us poorer than had we remained. Sovereignty of the sort Boris Johnson has fought for comes at a price. Although it’s one many people may decide they are willing to pay.