Johnson’s and May’s Brexits: The Key Differences

(Bloomberg) --

The difference between Boris Johnson’s planned Brexit deal and that of his predecessor Theresa May can be summed up in one word: harder.

Johnson wants to put greater distance between the U.K. and European Union so he can have greater freedom to strike international trade deals and diverge from EU standards.

You can dive into the new documents yourself, but here’s a brief summary of the key differences between Johnson’s Brexit and May’s:

Customs Union

This is the big one. Under Johnson’s deal the U.K. will leave the EU’s customs union, allowing it to strike its own trade deals with other countries. 

Under May’s proposals the country would have stayed in — at least until it had reached a free trade agreement with the EU — preserving trade ties built up over its 46-year membership of the bloc and its predecessors.

Free Trade Agreement

May’s political declaration spoke of both sides aiming to reach “an ambitious, broad, deep and flexible partnership across trade and economic co-operation.” 

With Britain outside the EU’s customs union, Johnson has pledged to seek a more limited free trade agreement: “An ambitious, broad, deep and flexible partnership across trade and economic cooperation with a comprehensive and balanced Free Trade Agreement at its core.”

Northern Ireland

With the U.K. outside the EU’s customs union, some form of border checks will be necessary. The question is, where? In Johnson's agreement, Northern Ireland will keep a foot in both systems: It will remain in the U.K. customs union but follow the EU’s customs code and many of its single market’s rules to avoid the need for border controls with the south. That will mean putting a customs border in the Irish Sea, something unacceptable to his predecessor. (You can read more here.)

Unlike May’s deal, which could have left Northern Ireland in the EU customs union indefinitely, Johnson has negotiated an exit route: The Northern Ireland Assembly will be able to vote on whether to go on applying EU rules. But that can’t happen until four years after the transition period finishes — so the end of 2024 at the earliest.

Level Playing Field

Johnson wants to give himself greater room to diverge from EU rules on, for example, social and environmental standards — something that has already angered Keir Starmer, the opposition Labour Party’s Brexit spokesman.

Here’s what May said about those safeguards:

The future relationship must ensure open and fair competition. Provisions to ensure this should cover state aid, competition, social and employment standards, environmental standards, climate change, and relevant tax matters, building on the level playing field arrangements provided for in the Withdrawal Agreement and commensurate with the overall economic relationship.

And here’s Johnson:

The precise nature of commitments should be commensurate with the scope and depth of the future relationship and the economic connectedness of the Parties. 

But then look at what assurances he’s had to give to get his deal accepted. Here’s a whole new section:

To that end, the parties should uphold the common high standards applicable in the Union and the U.K. at the end of the transition period in the areas of state aid, competition, social and employment standards, environment, climate change, and relevant tax matters. The Parties should in particular maintain a robust and comprehensive framework for competition and state aid control that prevents undue distortion of trade and competition; commit to the principles of good governance in the area of taxation and to the curbing of harmful tax practices; and maintain environmental, social and employment standards at the current high levels provided by the existing common standards. In so doing, they should rely on appropriate and relevant Union and international standards, and include appropriate mechanisms to ensure effective implementation domestically, enforcement and dispute settlement. The future relationship should also promote adherence to and effective implementation of relevant internationally agreed principles and rules in these domains, including the Paris Agreement.

On the face of it, Johnson’s deal commits the U.K. to a host of new safeguards and trade relationships. However, the political declaration is just that — a statement of intent rather than a binding commitment.

To contact the editor responsible for this story: Adam Blenford at ablenford@bloomberg.net

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