Many people in Britain and across Europe will breathe a sigh of relief today if, as expected, the British Parliament ratifies a new trade agreement with the European Union. The 11th-hour deal will prevent the collapse of a trading relationship that accounts for 43% of Britain’s exports and hundreds of thousands of jobs in manufacturing and farming. It will allow tariff-free commerce to continue — albeit with new snags and delays — across the English Channel after Jan. 1, when Britain’s exit from the E.U. takes full effect.
Prime Minister Boris Johnson, who won election a year ago by promising to “get Brexit done” after years of bitter domestic debate and painful negotiations with Brussels, is claiming victory, with some justice. Britain has regained control over movement across its borders from Europe (though overall, net immigration has not decreased); it will no longer be ruled by the European Court of Justice; and it is free to strike its own trade deals with the rest of the world, including the United States.
Brexit nevertheless still looks likely to be a net negative for Britain, and for transatlantic relations, both in the short- and medium-term. Though Mr. Johnson avoided the disaster of an E.U. exit without a trade deal, the pact he struck is very limited. It covers exports of manufactured products, which make up about 10 percent of the British economy, but not services, which constitute 80 percent. Banks, trading firms, lawyers and others accustomed to selling their services across the 27 E.U. countries will no longer be able to do so without licenses and permits; thousands of London jobs are moving to the continent. The government’s own budget office has estimated that Britain’s gross domestic product will be 4% lower 15 years from now than it would have been had it remained in the E.U.