What Is Brexit? And How Is It Going?

Britain broke from the European Union’s regulatory orbit on Jan. 1, casting off nearly half a century inside the bloc and embarking on what analysts described as the biggest overnight change to occur in modern commercial relations.

Far from closing the book on Britain’s tumultuous relationship with the rest of Europe, the split, known as Brexit, has opened a new chapter — one that could reshape not only the country’s economy and politics, but even its borders.

Prime Minister Boris Johnson has promised voters the benefits of a more entrepreneurial nation, citing Britain’s rapid Covid-19 vaccination program, though that was commissioned while the country was still operating under E.U. rules, during the 11 months between its formal departure in January 2020 and the finalizing of new trade terms.

The risks of the new approach are already becoming evident, too. New trading obstacles have shown themselves in forms as small as a ham sandwich confiscated from a truck driver and as large as a naval confrontation in the English Channel.

Let’s start with the basics.

Why “Brexit?”

A portmanteau of the words Britain and exit, Brexit caught on as shorthand for the proposal that Britain split from the European Union and change its relationship to the bloc on trade, security and migration.

Britain has debated the pros and cons of membership in the club of European nations almost since the idea was first broached, after World War II. It finally joined in 1973 — and held its first referendum on whether to leave less than three years later. At the time, 67 percent of voters supported staying.

But that was hardly the end of the argument.

In 2013, Prime Minister David Cameron promised a new national referendum. The options it offered were broad and vague — “remain” or “leave” — and Mr. Cameron was convinced that “remain” would win easily.

That turned out to be a serious miscalculation.

As voters in Britain went to the polls on June 23, 2016, a refugee crisis had made migration a subject of political rage across Europe.

Leaving is a very big deal economically.

Europe has been Britain’s most important export market and its biggest source of foreign investment, and E.U. membership helped London cement its position as a global financial center.

British companies have long been able to move goods to and from the European Union without taxes or tariffs. People could move freely, too.

But as 2021 began, business changed for many — for example, automakers, who rely on suppliers across Europe, and touring musicians, who suddenly faced a thicket of visa rules.

The agreement that Britain and Brussels reached late in 2020 avoided tariffs or quotas on goods. But traders still confronted new paperwork and unpredictable delays, sometimes resulting in rotting cargoes.

And the services sector — about 80 percent or more of British economic activity, comprising not only London’s powerful financial industry, but also lawyers, architects, consultants and others — was left dependent on patchwork decisions by European regulators. While London’s financial expertise is difficult to match, some obstacles are inevitable.

Britain’s national statistics agency has reported signs of an initial drop in goods trading with the bloc, and the Office for Budget Responsibility, another independent official body, has estimated that the country’s economic output could be 4 percent lower cumulatively over the next 15 years than it would have been inside the European Union.

Pro-Brexit lawmakers got a lot of what they wanted.

Citizens of E.U. member states can look for jobs elsewhere in the bloc, work there without special permits and stay after they have left their jobs. But the trade deal ended the free movement of people between mainland Europe and Britain, even halting British involvement in a European student exchange program.

The European Union operates a single market, with member countries accepting shared rules and regulations so that goods, services and capital can move freely. It’s also a customs union: Members agree to apply the same taxes on goods from outside the bloc, so they can be shipped within the European Union without further tariffs.

Britain has left both the single market and the customs union. It can pursue separate trade deals with other countries, something the most fervently pro-Brexit lawmakers in Britain considered crucial. And it can set its own rules, another key demand, although the deal permits either side to seek redress for regulatory changes that might give the other an unfair advantage.

After years of chaos that ended the careers of two prime ministers — Mr. Cameron and his successor, Theresa May, whose proposed deal failed to satisfy hard-liners — Brexit has also brought political dividends for Mr. Johnson and his allies. His Conservative Party won a decisive majority in 2019 in an election fought under the slogan “Get Brexit Done” and has made further inroads in Brexit-supporting areas that were once strongholds of the opposition Labour Party.

But they could yet lose Scotland.

Along with Northern Ireland, Scotland rejected Brexit in the 2016 referendum, with a vote of more than 60 percent to remain in the European Union. And that stark divergence of opinion has shaken the far older union between England and Scotland.

A second independence plebiscite there, following one in 2014, could lead to the fracturing of the United Kingdom. Were Scotland to become independent, Britain would lose 8 percent of its population, a third of its landmass and significant measures of international prestige.

The pro-independence Scottish National Party has dominated the Scottish Parliament for more than a decade, and its leader, Nicola Sturgeon, fought elections in May on a promise to legislate for a fresh referendum, with the disruption of Brexit as its justification. She fell one seat short of winning an overall majority but vowed to keep pressing for a referendum.

For a second independence referendum to be legal, however, it would almost certainly need the agreement of London, and Mr. Johnson has repeatedly said no. Ms. Sturgeon’s S.N.P. could still pass its bill with the backing of a smaller party, and if neither side backs down, the result could be a court battle, or even a constitutional crisis.

What about Northern Ireland?

Northern Ireland, which is part of the United Kingdom, has the country’s only land border with the European Union — the politically sensitive 310-mile frontier with Ireland.

Thousands died in decades of sectarian strife there before a peace process in the 1990s, and both sides in the Brexit talks made it a priority to avoid reimposing border checks.

Under a deal struck late in 2019, Northern Ireland will continue to follow many European rules, so trucks can continue to cross the Irish border freely. New paperwork and some regulatory checks were added for goods moving between Northern Ireland and the rest of the United Kingdom instead, causing some British companies to limit distribution there.

The fishing industry remains a sore point.

Britain’s fishing fleet is a small fraction of the size it reached in the middle of the last century — a decline for which Brexit proponents have long blamed E.U. rules on sharing access to fisheries.

The British government cast its split from the European Union as a chance to revive an industry that was also a storied way of life. It became a major sticking point in the deal negotiations.

Both sides had to compromise: E.U. boats will keep more fishing rights in British waters than Britain had demanded, but over a shorter period than Brussels had called for. Yet tensions are already re-emerging.

British fishing companies have long sold much of their catch in E.U. countries. Some seafood exporters say that they could be driven out of business by the added post-Brexit bureaucracy and the extra time required to get their products to buyers in continental Europe.

On the European side, French fishing boats briefly mounted a protest blockade in May over new fishing rules set by the semiautonomous island of Jersey. Britain sent two Royal Navy ships in response.

What’s next?

For bankers, traders, truckers, architects and millions of migrants, the Dec. 24 trade agreement was only the beginning of a high-stakes and unpredictable experiment.

Britain has been short of customs agents to deal with the tens of millions of customs declarations now needed, and even veterinarians to carry out new health assessments, industry experts said. It has delayed some of its own new border checks until 2022.

In the four years after Britain’s referendum, the number of Europeans migrating to the country for work plunged, and British companies sent employees to Paris and Frankfurt to set up toeholds on the continent. The number of jobs that will be relocated, or created in different places, is still becoming clear.

So is the future of some E.U. citizens in Britain. More than more two million have been granted “settled status,” the right to stay indefinitely. But applications close at the end of June, and the process has made few provisions for those unable to complete it online, much less for those who don’t realize they need permission to stay somewhere they have lived for decades.

Stephen Castle contributed reporting.