The new process agreed for safeguarding a 'level playing field' between UK and EU businesses after Brexit sets such a high bar for proof that key elements are likely to be enforced only rarely, according to detailed new analysis by IPPR published today.
The delicate compromise, designed to secure UK sovereignty while also meeting the key requirements for tariff-free trade, will be especially difficult to enforce if the UK fails to keep pace with improved EU levels of labour or environmental protection, the think tank finds.
Over all, IPPR highlights three important benefits among the gains made by agreeing the deal: tariff-free and quota-free trade in goods, continued social security coordination between the UK and the EU, including healthcare coverage, and continued data-sharing for security purposes. All these make it preferable to a no-deal outcome, the paper says, even though the UK economy is still expected to take a hit.
But under the agreement, commitments on workers’ rights and environmental standards to maintain fair competition are considerably weaker than expected. There is only a commitment not to lower current levels of protection in a way that affects trade or investment - which would be difficult to prove.
On the UK keeping up with any future strengthening of such rights and protections by the EU, the agreement is even weaker, IPPR says, making it more difficult to prevent differing standards over time. Any assessment of the impact of divergence must be based on “reliable evidence” and not mere “conjecture or remote possibility”, the agreement states. Even then, proposed “rebalancing measures” - sanctions in the form of tariffs, designed to compensate one side for an unfair disadvantage - face being referred to a complex arbitration system before they can be introduced.
This makes the prospect of such a sanction even more remote. As a result, the IPPR paper says, “rebalancing measures are only likely to be used in a rare number of scenarios”.
Marley Morris, IPPR Associate Director for Immigration, Trade and EU Relations, said: “This thin deal is better than no deal at all, but still creates major trade barriers with our closest neighbour, which will inhibit growth and slow the economic recovery.
“The protections it offers on labour and environmental standards are also surprisingly weak and appear to leave considerable scope for a UK government to weaken EU-derived protections. This leaves protections for workers, climate and the environment at serious risk of being eroded.”
*Read The Brexit EU-UK trade deal: A first analysis by Marley Morris here
* Institute for Public Policy Research https://www.ippr.org/
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