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Trade Friction, Economic Costs Follow Brexit Deal

MICHEL MARTIN, HOST:

Now to Europe, where the long and often bitter divorce between the United Kingdom and the European Union is finally complete. On New Year's Day, the transition period meant to ease their separation came to an end. So now, after 47 years in the European Union, Britain has severed almost all its ties with the EU and will now strike out on its own. To examine the implications of this monumental event on both sides of the English Channel, we are joined now by NPR's London correspondent Frank Langfitt and reporter Rebecca Rosman, who is in the French port of Calais. Frank, welcome. Thank you for joining us.

FRANK LANGFITT, BYLINE: Hey, it's great to be here, Michel.

MARTIN: And, Rebecca, welcome to you.

REBECCA ROSMAN, BYLINE: Hi.

MARTIN: So 4 1/2 years, Frank, and the U.K. out of the EU. What's been the reaction of the British people after all this time?

LANGFITT: I think there's really - frankly, Michel, that there was some kind of free trade deal. The real concern here was there would be no deal at all, that after all of this arguing for many years, the U.K. would actually walk away empty-handed and that you would see tariffs and, like, a massive slowdown at the border. Yesterday, I was there, and it was very smooth. Not many trucks even showed up. But I think most people here are glad that this very long and tortuous process is concluded.

MARTIN: Well, one of the big discussions over the past 4 1/2 years leading up to the split is - would there be economic costs? So, Frank, you know, what do we know about that. Is that picture becoming clear, the cost of the breakup?

LANGFITT: Yeah, I think it's going to cost the economy no doubt. And the reason for that as you know, normally, you do - a free trade deal's about removing barriers. This is a free trade deal that - this is a process that actually puts them up. So, for instance, it's going to be an extra $10 billion in new paperwork for British exporters. You're going to go from frictionless trade to more friction. And the expectation is U.K. per capita GDP here is going to grow by about 6% less than it would have if the U.K. had stayed in the EU. There's an economist I know with the King's College in London named Jonathan Portes. This is how he puts it.

JONATHAN PORTES: Brexit will make us poorer, poorer than we otherwise would've been. There will be this persistent drag on growth. Some of us have described this as Brexit will not be a blowout for the British economy - it'll be a slow puncture.

MARTIN: Let me talk more about trade with Rebecca. Rebecca, you are at the French port of Calais, where usually thousands of trucks cross the English Channel by ferry and the rail tunnel but not for the past few days, I take it.

ROSMAN: Yeah, it's been extremely quiet over here, hardly any traffic in either direction, I would say maybe only a third of the number of trucks you'd expect on an average day. Most truckers are staying away because they feared these massive delays and hiccups as new customs forms and other regulations came into effect. Even though, you know, the U.K. is an island and there is this whole body of water separating it from mainland Europe, it has been easy to forget that this is an international border. But now it's back with a vengeance. And despite a free trade agreement - you know, no tariffs, no quotas - there's still a lot of forms to fill out and fees to pay. Obviously, people won't avoid this route forever. And customs officials that I spoke with here in Calais did say they expect more delays to come starting mid-January.

MARTIN: Frank, let's go back and step away just from the trade issue itself and just look more broadly at the political landscape. I mean, Brexit bitterly divided British voters. What's the sense of how that stands now? Is there a sense that all the intensity and anger around this is abating somewhat? Does it seem like the is on the way to healing?

LANGFITT: Not yet, Michel. I think that the divisions that Brexit created here or exacerbated are far from over. And I'll give you an example. Brexit is actually sort of dividing the United Kingdom now in almost a literal way. So one of the things is if you were remember on the island of Ireland, there was this desire to avoid a land border across the island of Ireland separating Northern Ireland, which is a part of the U.K., with the Republic of Ireland, which is a part of the EU. And in order to do that, they're now going to actually have to have a regulatory border inside the United Kingdom. Basically, what they say down the Irish Sea between Northern Ireland and the rest of the country, they're going to be checks on some products coming in, say, from England, where I live, into Northern Ireland.

And this has really angered a lot of - quite a few people I know in Northern Ireland who've already kind of feel like the rest of the United Kingdom doesn't care about them much anyway. And so one of the questions is - do these sort of new divisions inside the U.K. actually push Northern Ireland closer to reunification with the Republic of Ireland in the south, which is a part of the EU? And that's certainly - the last time I was up there, which was a number of months ago in Northern Ireland, people felt like it was actually speeding up that process.

MARTIN: And speaking of divisions inside the U.K., Scotland voted heavily to stay in the EU during the Brexit referendum. What's the attitude in Scotland now? Are people in Scotland prepared to accept Brexit?

LANGFITT: I don't think so. There's still a lot of anger over what people in Scotland feel they lost out, particularly specific benefits. And Nicola Sturgeon - she's the first minister. She basically is the leader of Scotland. She says the answer to all of this is to actually leave the U.K. and eventually rejoin the EU. And today, addressing the EU, she wrote, we're now faced with a hard Brexit against our will. We didn't want to leave, and we hope to join you again soon. Her party, the Scottish National Party, is going to be running on a platform to have another independence referendum. This is in parliamentary elections in May up in Scotland. And if they win big, they're going to turn around to Boris Johnson, say you've got to give us an independence referendum. And, honestly, the country could, down the line, be heading for a constitutional crisis.

MARTIN: Rebecca, what about the EU? What's been the reaction? And has that been weakened in any way by Britain's departure?

ROSMAN: No, I think that the EU feels stronger than ever after Britain's departure. I would say that the last 4 1/2 years have been a very messy time and an exhausting period for the U.K. and the EU. Just even economically speaking, growth in the U.K.'s financial sector was almost nothing last year. And I don't think European nations as a whole are really buying this take-back-control promise of Brexit. Rather, people really see the U.K. as an island now, you know, that's isolated itself from the rest of Europe and is very much alone.

What European countries are focusing on is strengthening their own ties with each other. The Franco-German alliance is stronger than ever. There's a lot of determination to address problems together. One example I can give you is earlier this year, when the EU put out a jointly funded $918 million pandemic recovery fund. And leaders have really been working hard to drive home this message to the European people of unity. Yesterday, France's European Affairs Minister Clement Beaune made a speech at the port here in Calais. And I just want to play a little bit of what he said.

(SOUNDBITE OF ARCHIVED RECORDING)

CLEMENT BEAUNE: (Speaking French).

ROSMAN: So he's saying here, you know, the goal of these last few years has been to make Europe stronger than ever. And if there ever is a breakdown again like this, the answer's not to leave but to work together to fix these issues. One example he also gave about the benefits of these - this EU partnership was the coronavirus vaccines. He said because of the EU's collective bargaining skills, they managed to negotiate a lower price for the vaccine compared to the U.K. or the U.S.

You know, I've been speaking with people on the street here, and they say they feel the same way. They regret Britain's departure, but they see their future in a united Europe, you know? That said, it's going to be a rocky road the next few months, years, with a lot of issues still to be addressed. The text of this deal that was reached on Christmas Eve - it's 1,246 pages. So there's a lot of details there that still need to be ironed out - fishing, the financial industry, other services. But regardless, I would say there's just this overwhelming sense here in Europe that the EU is only stronger following the U.K.'s departure.

MARTIN: That was reporter Rebecca Rosman in Calais, France. We also heard from NPR's Frank Langfitt in London talking about the culmination of that long drawn-out battle to separate Britain from the European Union, or Brexit. Thank you both so much for talking to us.

ROSMAN: Thank you.

LANGFITT: Happy to do it, Michel. Transcript provided by NPR, Copyright NPR.

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