Having now taken a few days to digest the detail of the UK-EU agreement, here's a couple of observations from me on the deal, what it means, how we got here, & where it might take future UK-EU relations.

(A long thread)

First, let's be clear that negotiating a deal in 9 months, against the odds, and in the middle of a pandemic, is an achievement. It's too easy to underestimate the difficulty of negotiating over the screen for 4 months, from Mar-June, and under enormous pressure. /2

Both @DavidGHFrost & @MichelBarnier and their teams, deserve a lot of credit for sticking up with it in hard circumstances, often with lacking political clarity, & high stakes.

This shouldn't preclude us, or MPs and MEPs, from looking critically at the deal on the table. /3

That we have a deal is a result of the UK & EU having found a way to protect their core defensive interests.

From the EU's view, integrity of the single market is preserved with level-playing field obligations which go virtually beyond any other 3rd-country (even the Swiss). /4

For its part, the UK has negotiated down EU ask on dynamic alignment on state aid; eliminated any references to EU law; removed any role for the ECJ (NB not in the whole future relationship, due to EU law in NI Protocol); and preserved its right to control access to waters. /5

Amid all the announcements today, it's easy to overlook that the OBR has updated its scenario on a no-deal Brexit. It exposes an undeniably hard reality for the Govt that claims that the UK would "prosper mightily" under no-deal next year.

(Short thread)

1. Key chart: a no-deal/WTO/Australia-style Brexit would delay the point at which econ output regains its pre-virus peak by "almost a year to the third quarter of 2023."

In the upside scenario, this cross-over point could be at the start of 2022; in the downside, in 2025. Grim.

2. Next year, a no deal Brexit would reduce real GDP by around a further 2% - as a result of immediate disruption to the border and uncertainty facing businesses. That's on top of the Covid-related contraction.

3. While there's some short-term border disruption, most of the costs come in the medium term: from lost employment; productivity losses; lower business investment.

Exactly the opposite of what the Chancellor said to @AndrewMarr9 on Sunday.

4. Underneath these numbers, output would fall *below* the Covid levels for several key sectors: Manufacturing, professional services, financial services, retail, energy.

All trade intensive sectors that have been spared the same drop in output as the non-tradables this year.

These are the questions, big and small, that I will be asking about the shape and quality of a Brexit deal when the text is out:

(A long thread)

On manufactured goods:

1. Does the agreement provide zero-tariff and zero-quota access on all goods?

Where to find the answer: Chapter on Tariffs

2. Under what circumstances might tariffs be imposed in the future?

Where to find the answer: Chapters on Trade Remedies, on Subsidies, and Trade and Labour, and Trade and Environment

3. Is there “mutual recognition of conformity assessment”? If so, what products does it cover?

Chapter on Technical Barriers to Trade (TBT) and relevant annexes

4. What are the agreed “rules of origin” requirements?

Chapter on Rules of Origin

Amid all the talk by the Chancellor about the Brexit dividends, one could forget that the OBR has updated its assessment of the economic impacts of Brexit:

1) Import and export intensity reduced by Brexit, consistent with the OBR's 2016 assumption of a 15% reduction in each

2) Trade volumes down, estimated 15% lower than had we stayed in the EU

(The OBR cites the analysis that @JohnSpringford has done isolating the effects of Brexit)

3) The OBR notes (rightly) that, because the UK-EU TCA is yet to be fully implemented, trade barriers will "rise further" and "probably take several years to come through"

4) Most importantly, the OBR claims that Brexit will lead to a 4% reduction in long-run potential productivity.

In other words, Brexit will have made the UK poorer by 4% in the long run.