Why Johnson’s Brexit Deal May Not End His Party’s Europe Feud

(Bloomberg) -- The Brexit trade deal could be reopened if the two sides cannot resolve a dispute, or want to change the terms of the agreement, according to people familiar with the matter.

The risk is that this will mean years more arguing over how close Britain should be to its nearest trading partner, potentially making Brexit a permanent battleground in U.K. politics and denying some businesses the long-term certainty they want.

One of the biggest stumbling blocks in the negotiations was the question of how to settle disputes over trade in future. According to people familiar with the contents of the agreement, which has not yet been published, it is likely to work like this:

• Either side can hit the other with tariffs in particular areas if they think it is justified under the terms of the agreement
• If one side thinks the other is being unfair on such tariffs, they can take it to an arbitration panel, which is independent and will not be the European Court of Justice
• Individual chapters of the trade agreement can be reopened to renegotiate particular areas where there are disputes
• A nuclear option will be available to terminate the whole trade deal if it’s not working out, but the security agreement would stay in place

Prime Minister Boris Johnson is likely to use these points to help persuade euroskeptics in his Conservative Party that he has delivered Brexit in full and that the U.K. is now in control of its destiny.

The agreement struck on Thursday has “resolved a question that has bedeviled our politics for decades,” Johnson told a press conference. But the terms of the deal may still keep that question alive.

©2020 Bloomberg L.P.