This past week has seen further developments that provide interesting glimpses into what the future relationship between the EU and the UK may look like after Brexit.

Data Protection

Regarding data protection regulation, Brussels has granted the UK data protection regulation ‘equivalence’ status. This means, UK data protection regulations are considered equivalent to EU standards and data can continue flowing across the channel. This decision was important in particular for industries where data exchange across borders are particularly important - such as the insurance industry – and for law enforcement cooperation. While this is certainly good news, like in financial services – where the EU currently refuses to grant UK regulation equivalence status – this decision can be unilaterally revoked. Indeed, the commission has announced regular checks and a review after four years. This reinforces a trend that was to be expected once the terms of the UK-EU Trade and Cooperation Agreement (TCA) had become clear, namely, that the UK would be locked into a system where the UK government can choose to deviate from EU regulation, but will lose market access as a result. The two months since Brexit have clearly shattered any illusions that “taking back control” can be done without considerable costs.

Trade Barriers

A recent survey by IHS Markit amongst UK manufacturing companies found further evidence that the new non-tariff trade barriers have a real impact on UK exporters. A majority of companies reported export losses and disruptions to their supply chains due to Brexit. The manufacturing sectors is thus another sector that reports a considerable negative impact from Brexit, after other sectors – in particular fishing and seafood – have struggled with very considerable disruption.

Free movement of labour

There is also an increasing number of sectors that are mainly negatively impacted due to the new restrictions on free movement of labour across UK-EU borders. This week, growers of ornamental flowers have issued a stark warning that part of the harvest of daffodils and other spring flowers will be lost due to their inability to recruit the required number of pickers. While the government has adopted a seasonal workers pilot scheme, which guarantees that UK food producers can continue drawing on EU workers for harvesting, ornamental plants do not fall under this scheme. The impact is potentially large for a sector where pre-Brexit more than half of the pickers were recruited from EU countries.

Governance and UK’s international relations

The most significant news around Brexit in the past week, however, concerned the appointed on Wednesday of David Frost – UK’s chief Brexit negotiator – to a cabinet position in order to coordinate the UK-EU relationships.

This is a remarkable move in several respects: For one, many commentators were quick to point out the irony in Lord Frost – an unelected civil servant – joining the Cabinet Office as a Minister of State.

More importantly, the appointment of a Cabinet Minister in charge of EU relationships raises important questions about the governance structure that will govern both the TCA and the UK’s relationships with the EU more broadly. In particular, managing the relationship between the UK and EU countries like France and Germany is currently the role of the Foreign Secretary Dominic Raab. While part of Lord Frost’s brief will also overlap with Secretary of State for International Trade Liz Truss’s portfolio. Some observers fear that Lord Frost’s appointment risks duplicating some of these relationships and creating confusion over the respective responsibilities of Lord Frost, the Foreign, Commonwealth and Development Office, and the Department for International Trade. It remains to be seen how these uncertainty will affect the UK’s negotiation position at a time when it becomes increasingly clear that the EU will treat the UK mainly like the competitor it now has become for the block and is not inclined to grant the UK any easy victories.

Most importantly perhaps, Lord Frost will replace Michael Gove as co-chair of the Joint Committee overseeing the implementation of the TCA. This comes at a time where Gove has just started delicate talks with the EU side over the implementation of the Northern Ireland Protocol. So far, Lord Frost has mainly made a name for himself as a staunch advocate of an inflexible hard-line approach to Brexit. He’s credited for the hard Brexit strategy of PM Johnson, a very minimal trade deal, while reportedly also convincing the PM back in December to threaten to break international law with an Internal Market Bill that would have overruled parts of the Brexit agreement. As such, Lord Frost does not seem like the person who will seek to appease the growing tensions with the EU over various issues including the NIP, the ‘regulatory equivalence’ of the City of London, and a possible renegotiation of the rules governing exports of shellfish. Indeed, the unexpected appointment may signal that PM Johnson’s vision for the relationship with the EU remains one that favours sovereignty over market access even when it entails tensions and conflicts with Brussels.