British Prime Minister Boris Johnson has said he has struck a” big new deal ” on Brexit. But the agreement he struck with the European Union would erect significant trade barriers for companies operating in the United Kingdom, reduce growth and leave the country poorer.

The deal still needs to be approved by the UK Parliament, which will meet in a special session on Saturday. To ensure its passage, Johnson must win over lawmakers who voted three times against the previous Brexit deal agreed by his predecessor Theresa may.

Johnson will struggle to make the case that his case is better than in may when it comes to the economy. Her agreement would keep the United Kingdom in close co-ordination with CEOS, despite it leaving the bloc’s combined market and customs Union. Johnson has abandoned that goal, and instead wants Britain to gain greater control over its rules and global trade policy through easy access to the EU market of about 450 million people.

“Flexibility comes at a cost,” said Jonathan ports, a Professor at king’s College, London, and senior research fellow at the UK’s changing Europe think tank. “The fact is that in economic terms there is no doubt that the benefits of being in the EU customs Union outweigh any potential free trade deals with another country.”

While a Johnson deal would be better for the economy than leaving the European Union without trade protection arrangements, Britain faces a future in which many of the benefits of decades of integration with the European Union will be unwound. EU membership has helped the UK attract dozens of foreign companies, including major us banks and Japanese carmakers, who have used the country as their base in Europe. About 46% of British exports go to EU markets.

The way the British economy works will change significantly if the Johnson deal is approved.

In practical terms, his agreement will lead to the covering of new barriers, including burdensome customs checks at the border with the EU. And if the United Kingdom decides to scrap EU rules-perhaps so it can strike trade deals with the United States and other countries-manufacturers in the UK may have to make two versions of each product or lose European customers. The UK services sector, which accounts for 80% of the UK economy, will also face new barriers. Banks have already moved some activities from London to the cities of the EU.

“Unhindered EU trade and regulatory alignment is vital for UK prosperity and jobs, “the Confederation of British industry said in a statement, adding that the deal is” inadequate ” on services and that big questions remain about whether a free trade deal of sufficient depth can be agreed with the EU before transitional agreements expire.

Johnson’s Brexit deal would mean significant economic pain. Analysis of his approach, published recently by the UK in a changing Europe, showed that new trade barriers would reduce national income per person by 2.5% after 10 years, compared to staying in the European Union. That means lost production of 800 pounds ($ 1,030) per UK citizen, more than double the estimated hit under may’s plan.

Factor in a 10% reduction in trading and productivity losses caused by new barriers, and the Outlook is even more severe. The hit to national income rises to 6.4% under the Johnson deal, or 2,000 pounds ($2,575) per person, compared with 4.9% under may’s agreement, according to the analysis.

Business groups reacted to Johnson’s deal with caution on Thursday. Adam Marshall, Director General of the British chambers of Commerce, said in a statement that “businesses need the opportunity to analyse exactly what the terms of this agreement will mean for all aspects of their operations.”

“Let’s not forget, we’ve been here before. There is still a long way to go before businesses can confidently plan for the future, ” he added.

More than three years of uncertainty over future trade policy have forced many British companies to delay investment, and a Brexit solution will lead to some immediate economic help. According to Capital Economics, the increase in investment as the revival of deferred projects will help to stimulate growth next year by 0.5 percentage points to 1.5%.

But the structural changes to the UK economy caused by the Johnson deal will reduce the country’s economic prospects in the long run. The UK government has modelled a number of Brexit scenarios at the end of 2018, each showing that the UK economy will be worse off outside the European Union.

“It’s even worse for the economy than Theresa may’s deal,” Hilary Benn, a member of the opposition labour party, told the BBC on Thursday. “It’s not in the interest of the economy, jobs, investment and the future of our communities.”

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