Less than a week before the deadline for Brexit to take effect, the UK and the EU announced on 24 December that they had reached a trade agreement for the post-Brexit era. The agreement was reached at a time when negotiations had been stalled for months, and it was likely that the two sides may not be able to reach an agreement to overcome the current situation. The months-long dispute between the two sides over an agreement on trade issues is expected to end. The British Government has described the deal as “fantastic news” for families and businesses in every part of the UK. “Everything that was promised to the people during the 2016 referendum and last year’s general election has been fulfilled with this agreement,” said Boris Johnson. “We have regained control of our money, our borders, our laws, our trade and our fishing waters,” he said. Johnson believes the deal will allow exporters to trade “more with our European friends.” European Commission President, Ursula von der Leyen, also said the deal was fair and balanced, meaning that we could finally get past Brexit and Europe can continue to move forward. This is the largest bilateral trade agreement signed by the EU and the UK. According to a British source, the value of trade in this agreement is equival to 747 billion euros. Without an agreement, the UK and the EU would have had to impose extensive tariffs on each other’s goods and services from 1 January 2021.
The agreement means Britain and Europe can continue to trade without further taxation or tariffs on imported goods and the agreement is expected to be implemented from the first day of the New Year, creating a platform for future cooperation on issues such as the fight against crime, and energy and data sharing. Due to the large size of the agreement, which is apparently about 2,000 pages, details are not yet known, but leaders on Thursday explained various aspects of the agreement. Big changes lie ahead for Britain and the European Union. Leaving the EU, although done through a trade agreement, will change travel, life and trade between the EU and the UK.
Britain’s exit from the EU means that it is no longer a member of the customs union and the European single market, and trade will not be as easy as it used to be. Thus, British commercial and financial companies will be restricted in providing services in the EU, and trade in goods will require documents that meet both European and British standards. The transit of goods in the border locations will be delayed and additional inspections will be carried out. In this way, the car market, airlines and many manufacturing companies will be forced to pre-order and store the parts, accessories and products they need, as they will not be able to order and receive them immediately as before. In particular, trade in animal products (meat, dairy, etc) will require special permits and health standards and more delays are likely. The European Automobile Manufacturers Association (ACEA) has also said that it will not be able to comment on the agreement until it is made public, as it could create more legal obstacles to the carmakers’ activities.
British companies will need to register in the EU for local licences and standards in order to continue to provide financial, commercial, consulting, etc, services. Given that 80% of the UK economy is based on providing services, this is not good news for economic actors in this sector. British citizens can travel to the EU on passports which have at least six months validity. Medical permits and vaccinations are also required for pets, which can take several weeks. As for financial and economic issues, although an agreement was reached between the EU and the UK, London will lose many of its trade and financial advantages in Europe and the world with this agreement in the medium and long terms.
“There is no better deal than being part of the European Union,” Scotland’s First Minister said following the recent agreement on Brexit. The First Minister of Scotland, Nicola Sturgeon, has said that the new agreement between the EU and Britain will pave the way for Scottish independence. Scotland’s First Minister said leaving the EU would cost jobs in Scotland, adding that the British Prime Minister, Boris Johnson, had agreed to a so-called “hard Brexit”. She said that “It beggars belief that in the midst of a pandemic and economic recession Scotland has been forced out of the EU Single Market and Customs Union with all the damage to jobs that will bring”. She said in a statement after the EU-UK agreement that “Scotland did not vote for any of this and our position is clearer than ever. Scotland now has the right to choose its own future as an independent country and once more regain the benefits of EU membership.”
Experts believe that the agreement reached between the EU and the UK is an unusual one that will further complicate the bureaucratic process for British businesses. The agreement states that trade between the EU and the UK will be conducted without any tariffs; however, the goods that will be exchanged between Britain and the EU will have to go through more legal steps than in the past. Of course, on the British-Irish border, which is a member of the EU, these steps will continue as before and will not change. The agreement also provides for a quota for fishing for Britain and the EU. Many other areas, including foreign, security and defence policies, are not covered by the agreement between the UK and the EU. Others still, such as mobile roaming, access to legal services, digital exchanges, transportation and energy, etc, all will change as compared to the past.
The trade agreement between the EU and the UK will eventually lead to a smaller British economy and longer processes of exporting and importing goods. This could have a direct impact on the country’s economy and drive foreign investors out of the UK who are looking for easier rules to operate. As the legal process for exporting and importing goods is prolonged, companies are losing interest in setting up new factories and businesses in the UK, preferring to invest in EU countries without strict trade rules.
