#Decryption – The deal is done : what do we know so far about the new deal ? 

On December 31, the long-awaited trade agreement was signed between the European Union and the United Kingdom. A 1,500-page document to seal a grueling divorce procedure for the said protagonists dragging on since the British referendum in 2016. Which lessons can be learned from the agreement? Which areas are impacted the most? Let us explain everything to you!

The European Union and the United Kingdom have finally been split. After several decades of legal, normative and political rapprochement, the ghost of an abrupt exit haunted Europe for too many weeks for an outcome only six days before the end of the transitional period. Here is an overview of the main decisions that have been taken to ensure the continuity of exchanges in the best possible way.

Boris Johnson et Ursula von der Leyen le 9 décembre à Bruxelles.
Boris Johnson and Ursula von der Leyen on December 9 in Brussels (Reuters).

The customs issue

            In the event of the creation of the single market, customs are coming back between the European Union and the United Kingdom after their disappearance in 1993. However, their constraints are less heavy than before and do not impact as severely on trade, which is now estimated at 700 billion euros per year. Indeed, the two parties have negotiated an absence of customs duties and quotas, which is a first for a trade agreement, as goods will simply have to be declared through import and export declarations. While this news was seen as a relief for the United Kingdom, some British economists are nevertheless counting on a loss of 4 points on GDP.

The end of free movement and Erasmus exchanges

            While goods and services were therefore spared by the agreement, this is not the case for the free movement of persons and students. Indeed, the island cuts short the desire of many Europeans to come and live their London dream by doing odd jobs. A point-based visa system is now in place. Thus, to earn a sufficient number of points, European citizens will have to present a job offer of more than 29,500 euros, demostrate that they will not be a burden on society, or prove they have a certain level of English to demonstrate their integration. In addition, Prime Minister Johnson has whistled the end of Erasmus exchanges in Great Britain. He said he regrets this decision but argued that the United Kingdom receives more foreign students than its students taking the opposite route, which makes British people “net contributors”. This withdrawal of Erasmus, motivated by the desire to make immediate savings, is strongly criticized by various Europhile media such as the Danish newspaper Information, which emphasizes all the benefits of these universities and the short-termism of this decision. In addition, the recognition of the status of foreigner for European students changes and their registrations fees will be doubled up.

The framework of competition rules

            The normative convergence undertaken throughout these years of collaboration could have been shattered in the event of an abrupt exit from the United Kingdom. The head of negotiations on the European side, Michel Barnier, has blown hot and cold on this issue, but the outcome appears to be a happy one. Indeed, standards remain close in areas as varied as the environment, climate change, tax transparency and social rights. The main innovation lies in the possibility for the British not to be in a “dynamic alignment”, i.e. having to follow the evolution of European standards. However, the agreement provides that the parties reserve the right to introduce tariffs if their rules are too far apart. In this respect, the weekly The Economist criticizes the creation by the agreement of 25 specialized commissions ranging from aviation security to intellectual property. According to them, the EU and the United Kingdom would then lock themselves into a constant process of negotiations, a kind of perpetuation of the Brexit situation that is harmful to both.

Fishing

            The fishing market represents 650 million out of the 700 billion euros of annual trade. More symbolic than anything else, the issue of fishing has long been the sticking point between the two parties because of the “Froggies” and their President Emmanuel Macron. Its intransigence would be due, in the beginning, to its will to capture the popularity of the fishermen in the North of France. The European Union and the United Kingdom finally agreed on a 25% reduction in the value of European catches in British waters over a transitional period of five years, which is far from the initial objective of a 60% reduction for London. After 2026, they will establish annually negotiated quotas. While the trade agreement is a relief for both parties, some European states openly fear a loss of political persuasion for the Union at the international level. While the United Kingdom may not have been the most assiduous student, its diplomatic strength and global reach were strong arguments in legitimizing European foreign policy. Others see the departure of the United Kingdom as an “opportunity” for the European Union. Poland thus considers that, freed from the British turbulence, Europe can now develop its own industrial policy and defend its single market more serenely.

            While the final outcome is a happy one, the signing of this agreement has been tortuous. The two protagonists have reached a compromise, not sure that this is the case for possible new deserted states. In view of the difficulties encountered, Brexit can therefore calm the ardor of the Euro-sceptics and thus catalyze a stronger Union, forming a bloc on the international scene.

 

 

 

 

Press Team

Alexandre Minassian

Leave a comment

Your email address will not be published. Required fields are marked *