One year on from the full implementation of Brexit – January 1st, 2021 – and, in truth, the transition is far from over. So far a balance sheet of gains and losses can only point at the direction of travel for the UK or the EU. But it is indicative of a rough road that holds little prospect of the promised glory days for a newly 'independent' Britain.
Even disentangling the economic damage caused by this historic folly from that caused by the pandemic remains problematic, a thin political cover still used by unrepentant Brexiteers. But the UK’s Office for Budget Responsibility predicts that leaving the EU will reduce long-term GDP by around four per cent, compared to a fall of about 1.5 per cent attributable to the pandemic. And by August 2021, although Britain’s total goods trade with the rest of the world had recovered to seven per cent below average 2019 levels, it remained 15 per cent lower with the EU.
This is before new UK rules and controls on imports from the EU were to be implemented this month. These require importers of goods from the EU to make cumbersome advance customs declarations and to pay any relevant tariffs.
Ireland has been given a welcome reprieve on these by Britain pending the resolution of the dispute over the Northern Ireland protocol, but they will be imposed eventually no matter what deal is done on the latter. At that stage it is likely that the relatively benign picture on Irish post-Brexit trade with the UK may deteriorate. A report from the Economic and Social Research Institute and the Department of Finance on post-Brexit trade records that imports from Britain to Ireland have fallen sharply, exports from Ireland to Britain have held up, for now, and there has been a surge in cross-Border trade. There has also been a major re-routing away from the landbridge in favour of new direct shipping services to the continent.
Promises by Leavers that the UK would quickly be able to sign up lucrative trade deals around the world have not materialised. Although it has managed to reach deals to extend to the UK the terms of previous EU trade agreements with Japan, Canada, Switzerland, Turkey and South Korea, the only entirely new trade pact is that recently signed with Australia. The prospects of a much-vaunted deal with the US look distant while the latter has also made clear that it will hold the UK to the terms of the Belfast Agreement.
The unfinished business of implementing the agreed protocol has also poisoned the divorce. This has left a soured relationship between the UK and both Ireland and the EU with the threat of a trade war still looming. Britain is diminished not enhanced on the world stage. Internally, Brexit has contributed to destabilisation in Northern Ireland, while in Scotland it has fuelled the cause of independence. A year on, and all for what?