October 17, 2019 / 3:19 PM / a month ago

Breakingviews - Johnson’s poor Brexit deal avoids worse outcome

Britain's Prime Minister Boris Johnson gestures towards European Commission President Jean-Claude Juncker during a news conference after agreeing on the Brexit deal, at the sidelines of the European Union leaders summit, in Brussels, Belgium October 17, 2019.

LONDON (Reuters Breakingviews) - Boris Johnson’s poor Brexit deal avoids a worse outcome. The British prime minister on Thursday struck a last-gasp agreement to leave the European Union, hours before the start of a crucial summit of European leaders. Winning parliamentary approval for the economically costly plan will be hard. At least the chaotic exit that Johnson had threatened is off the table for now.

Johnson’s allies hailed the agreement as a triumph of high-stakes negotiation. The reality is far less rosy. True, the deal reopens the 2018 withdrawal agreement the EU struck with former Prime Minister Theresa May, and removes the “backstop” that could have kept the UK tied to European customs rules. EU leaders had repeatedly ruled out either change.

To achieve this, however, the UK had to make far-reaching concessions. Northern Ireland will effectively remain in Britain’s single market for goods and farm products. To avoid introducing a hard border with Ireland, Britain will also police the EU customs union at Northern Ireland’s ports and airports. Johnson had previously insisted such moves would not be necessary.

Yet compromises necessary to win over EU negotiators - and, crucially, the Irish prime minister - also make it harder for Johnson to secure approval at home. The Democratic Unionist Party which repeatedly voted against May’s Brexit plan said on Thursday it could not support the new deal. That means the prime minister will need support from factions of the opposition Labour Party to get it through parliament.

Yet other aspects of Johnson’s revised deal are hard for his political opponents to swallow. The agreement waters down a previous British pledge to not undercut EU labour market rules and environmental standards. This will complicate future trade negotiations, limiting the UK’s access to EU markets and increasing the economic costs of Brexit. The UK in a Changing Europe, a think tank, estimates that in this scenario, UK gross domestic product per head after a decade would be 2.5% lower compared with staying in the bloc.

If Britain’s parliament rejects the deal on Saturday, Johnson is legally required to seek another Brexit extension - which EU countries will almost certainly grant. The prime minister will then probably push for an election in an attempt to secure a majority. Another option would be for parliament to accept the compromise, subject to it winning popular support in a referendum. The likelihood of Britain leaving the EU by the end of October remains slim. At least the damaging “no-deal” Brexit that Johnson has spent much of his short premiership threatening to impose has faded into the background.

Breakingviews

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