Brexit's Unending Cycle of Failure

Strategic Insights -

The 2016 Brexit referendum was meant to bring the UK independence from EU regulations, but its outcome has been a never-ending cycle of failure. Boris Johnson, who campaigned on "getting Brexit done," has now proposed a law that would allow him to repudiate parts of the UK's Brexit deal on Northern Ireland. This move would not only damage the UK's reputation for keeping its word but also invite a parallel EU repudiation of its free trade deal with the UK. The consequences would be far-reaching, enraging the Biden administration and dividing the west.

Key Takeaways:

  • Boris Johnson's proposed law to repudiate parts of the UK's Brexit deal on Northern Ireland would destroy the UK's reputation for keeping its word and potentially trigger a parallel EU repudiation of its free trade deal with the UK.
  • The Brexit referendum was a "peace project" that facilitated the Good Friday Agreement between Ireland and the UK, but the Leave campaign ignored the potential consequences of disrupting EU ties.
  • Tony Blair and John Major, joint progenitors of the Good Friday Agreement, warned of the consequences of Brexit in a visit to Londonderry in June 2016.
  • Theresa May's withdrawal agreement would have kept the UK in the customs union, but it was rejected by the Democratic Unionist party and others, including Boris Johnson.
  • The UK's decision to leave the single market and customs union has led to a significant decline in the country's trade with the EU, with the UK's trade in goods as a percentage of GDP shrinking from 24% in 2019 to 20% in 2022.
  • The UK's cumulative growth in real GDP per head has been poor since the 2016 referendum, lagging behind the US, EU, and Eurozone.
  • Lord Frost, Johnson's negotiator, has argued that the Brexit deal's provisions were imposed by the EU under duress, but this is inaccurate, and the issue lies with the unionists in Northern Ireland who have consistently rejected the Brexit deal.
  • The EU should engage cooperatively with the UK to make trade with Northern Ireland smoother, recognizing that Brexit has accelerated the EU's progress in making trade agreements.

Statistics:

  • 56% of Northern Ireland voters rejected Brexit in the 2016 referendum.
  • 53 members in the Northern Ireland Assembly are in favor of the Brexit protocol, while only 37 are against.
  • The unionist parties together received only 40% of the vote in the May 2022 elections.
  • The UK's cumulative growth in real GDP per head, 2015 to 2022: 0%, US: 12%, EU: 8%, Eurozone: 6%, France: 5%, Spain: 4%, Italy: 3%, Germany: 2%, UK: 1%.
  • UK trade in goods as a percentage of GDP, in constant prices: 2022 = 20% (forecast), 2019: 24%, 2016: 22%, 2015: 21%.
  • Total trade in goods and services as a percentage of GDP, in constant prices: 2022: 40%, Germany: 43%, France: 39%, Italy: 35%, UK: 28%.

Sources:

  • IMF: Cumulative growth in real GDP per head, 2015 to 2022 (%)
  • ONS: UK trade in goods as a % of GDP, in constant prices
  • Refinitiv: Total trade in goods and services as a % of GDP, in constant prices