Brexit Is Finally Happening, but the Complicated Part Is Just Beginning

Europe’s recent trade deals with Canada and Japan took seven years. Still, Mr. Johnson has repeatedly ruled out extending the transition date. The prime minister has often demonstrated willingness to confront the British political class and European leaders with supposedly unbreachable lines only to find flexibility. Perhaps, as the year progresses and the stakes get real, he may accept some sort of politically palatable euphemism for an extension, allowing trade to continue unhindered while talks go on.

But if Mr. Johnson holds firm, that raises two potential outcomes, neither conducive to expanding fortunes. Either Britain and Europe strike a narrow trade deal that governs some manufactured goods, while leaving out services — the bulk of the British economy — or Britain crashes out of the European bloc with no deal at all.

Even the threat of a no-deal exit would entail costly mayhem, as companies on both sides of the English Channel stockpile goods in anticipation of customs snafus and choked ports. That is what unfolded for much of last year as the British political system lurched toward a Brexit deadline without an agreed-upon plan, bringing a no-deal scenario into stark relief.

Adding to the risks, Mr. Johnson’s administration has declared intentions to break from European rules governing labor, the environment and product safety. European authorities have warned that the more Britain deviates from European standards, the more they will restrict access to the Continent’s enormous marketplace. Given that Europe is the customer for nearly half of Britain’s exports, any impediment would threaten jobs.

For Scotland, the unknowns are amplified by the revival of independence aspirations. The ruling Scottish National Party rose to power in 2011 with independence at the center of its agenda. But in a referendum held in 2014, Scottish voters decisively rejected leaving the United Kingdom, in large part because of warnings that such a step would entail grave economic costs.

The leader of the Scottish National Party, Nicola Sturgeon, has taken Brexit as impetus for another referendum, asserting that leaving Europe — whatever the final details — will cost jobs and livelihoods. She has argued that Brexit presents a dramatic change to Scottish life and therefore justifies a second independence vote.Mr. Johnson recently denied her request for a new referendum, but public pressures appear to be building.

Economic and political uncertainty have gripped Scotland for years, said Graeme Roy, who heads the economics department at the University of Strathclyde in Glasgow. “This is now the new normal.”

Article source: https://www.nytimes.com/2020/01/29/business/brexit-scotland-trade-eu.html?emc=rss&partner=rss