Christmas Eve Brexit deal is second-worst outcome

Boris Johnson's "oven-ready" Brexit is almost cooked in time for Christmas. A year after the British prime minister won a landslide by promising to complete the country's departure from the European Union – and just seven days before the end of the transition period – the two sides finalised a trade deal. Though the compromise avoids painful tariffs and a dangerous rupture in relations, it's a much harder form of Brexit than Johnson and others envisaged during the referendum of 2016. The costs are about to become clear.

The last-gasp agreement, unwrapped hours before Europe shut down for the Christmas holiday, is a big achievement. If ratified, it will provide a framework for future relations between Britain and the EU covering trade in goods and services, as well as agriculture, energy and fish. The full document, the text of which had not yet been published on Thursday afternoon, spells out standards for workers' rights, environmental protection and state subsidies. And it sets up a mechanism for resolving future disputes.

Nevertheless, the deal cannot prevent the erection of barriers to commerce that currently do not exist. Leaving the EU's single market and its customs union – an unprecedented act for a developed economy – will introduce new frictions to trade. Exporters will face new forms and customs checks. UK-based banks will no longer be able to offer their services across the EU. Trade-in stocks and derivatives will depend on the whim of regulatory equivalence granted by Brussels. British citizens will face new restrictions on their ability to work and study in the bloc. Even with a deal, the UK's Office for Budget Responsibility estimates this will lower UK GDP by about 4%.

The hope for both sides will be that the deal removes some of the political tension from the relationship. In Britain, however, the debate over Brexit will continue. Though Johnson can claim to have delivered on his promise to "Get Brexit Done", he has barely acknowledged the costs. The government will have to weigh future decisions to relax standards against the risk of EU retaliation, which could mean tariffs. That threat in itself will deter investment.

Four and a half years after the referendum, the benefits to Britain of leaving the EU remain fuzzy. Leaving without a trade deal would have been far worse. But this outcome is only marginally better.