Most products traded here between the UK and the EU will not face new constraints, but several new bureaucratic barriers will arise and the status of the UK financial sector appears unlikely.
Reason Of News:
British and European Union leaders signed a breezy trade pact on Thursday, barely a week before the United Kingdom officially left the embrace of both the 27-nation group, the main trade relationship.
What is Brexit?
The “British Exit” or “Brexit Exit” refers to a system of exiting the EU after 47 years in the political and economic union of European countries built on the ruins of World War II. Following a referendum that won 52-48 per cent of the “vote leave” camp in June 2016, Britain became the first nation to leave the EU, a union of now almost 450 million people extending from the Atlantic to the boundaries of Russia and Turkey. The official withdrawal of Britain on 31 January 2020 was declared by backers as a re-establishment of national freedom for the nation of 66 million inhabitants. Adversaries see it as a historic blow to European integration that could inflict severe economic harm and threaten renewed war on the Irish border, the only land border between the bloc and the United Kingdom. After its formal exit, London has adopted the existing principles of tight collaboration on everything from trade to student exchanges, but the transfer period ends at nighttime on 31 December.
What’s covered by the current deal?
Since March, both sides have been engaging in complicated talks to try to keep their trade-in products going from 1 January 2021. The deal announced on Thursday ensures that this exchange in commodities about half of the $900 billion in annual EU-UK trade will stay free of tariffs and quotas. However, goods passing between the United Kingdom and the EU will be subject to customs and other regulations, and additional paperwork is likely to cause extensive disruption. The arrangement was signed in parallel to the official withdrawal agreement concluded last year, which meant that extensive restrictions would not be brought back to the delicate border between Ireland, a member of the EU, and the British region of Northern Ireland. The third main feature of the arrangement is the allocation of fishing quotas between the United Kingdom and the EU.
Many other places are affected by this?
In certain ways, the agreement does not envisage collaboration at the same level as in the pre-Brexit phase. Financial and commercial facilities, the core of UK exports, are included only to a limited degree. For eg, there is no decision on the so-called equivalence which will allow companies to export their services from the City of London to the single market. The deal only includes standard rules on financial services, meaning that it does not have market access responsibilities. The same refers to foreign affairs, stability, and defense partnership, although the requirements on transport, energy and nuclear energy cooperation would remain below current standards.
What other ties are going to be scaled back?
Cell roaming, reciprocal acceptance of technical credentials, access to legal resources, digital commerce, and public procurement are other fields where collaboration will be diminished. While the EU and the UK have agreed not to require travel permits, the free flow of citizens will cease. This implies that EU citizens traveling to the United Kingdom, and vice versa, will be subject to border checks and will no longer be allowed to use biometric passports to move through automatic gates easily.
How will professional services have been influenced?
The arrangement means that, according to the EU reading of the Treaty, there will no longer be automatic mutual acceptance of technical credentials. Doctors, nurses, dentists, pharmacists, vets, technicians, or designers must have their credentials recognized in each Member State in which they wish to practice. This is a setback for the United Kingdom, which required “comprehensive coverage” to ensure that there were no “necessary” obstacles to controlled services. However, according to the UK Overview of the Agreement, the agreement also provides for a “system” for the acceptance of credentials.
The arrangement also contains obligations to ensure a ‘fair system.’ What the heck is that about?
The arrangement binds both parties to maintain their expectations of environmental, civil, labor, and tax transparency in order to ensure that they do not compromise each other. Any country would be in a position to enforce tariffs if they diverge too far according to arbitration. European companies upset with any British government incentives to competitors may petition the UK courts to decide whether they are unjust, EU officials said.
No fixed cap on just how much state assistance is problematic, this is taken on a “case-by-case” basis. The UK overview notes that both parties must be transparent regarding subsidies; both the EU and the UK will require an impartial body to track state subsidies. The Courts must be able to require the refund of any unlawful subsidies. It involves a rebalancing process.
So what’s finally done?
Since Britain is outside the EU, its customs union and the single market and no longer bound by the laws. Relations will also be focused on the divorce arrangement between the two parties in 2020 and the Trade and Partnership Deal sealed on Thursday. But those looking for an end to the often-acrimonious talks that accompanied the breeze vote are likely to be frustrated. The deal includes interim stages and review provisions, which means that further talks are pending on fisheries, trade regulations, and much more.
Reference:
SOURCE : AL JAZEERA AND NEWS AGENCIES
UK stands for: United Kingdom
EU stands for: European Union