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As of January 1, 2021, the UK will withdraw from the European Single Market and the EU Customs Union, and a true “Brexit” will begin. Analysts said that although the UK and the EU finally reached an agreement on future trade deals after difficult negotiations, bilateral economic and trade relations still face short-term adjustments and long-term difficulties.
Xinhua News Agency, London, January 1. As of January 1, 2021, the UK will withdraw from the European Single Market and the EU Customs Union, starting a true ‘Brexit’. Analysts said that although the UK and the EU finally reached an agreement on future trade deals after difficult negotiations, bilateral economic and trade relations still face short-term adjustments and long-term difficulties.
Under the Anglo-European Agreement, the two parties will continue to enjoy zero tariffs and quotas on merchandise trade, avoiding large-scale trade cost increases. Without a doubt, this is good news for the British and European economies affected by the epidemic.
Compared to “no-deal Brexit,” this deal has allowed both parties to “break free” to a great extent. But in the short term, even if there is a new deal to go with it, the trade flow between Britain and Europe is still not as smooth as before. How to adapt to the new business relationship as soon as possible is a challenge that both government agencies and commercial companies will face.
Analysts said that from now on, the flow of people and goods in Britain and Europe may not be as good as before, and the new customs inspection and other procedures will also increase uncertainty. The port of Dover closest to the European continent is likely to be “full of vehicles.” The British government has announced the establishment of a border control center to monitor and analyze the entry of goods and people through technical means in real time in order to minimize possible border chaos.
In the field of goods trade, Adam Marshall, director general of the British Chamber of Commerce, said that bilateral trade still faces “huge new non-tariff barriers”. The Welsh Farmers Association believes that three-quarters of Welsh food and drink exports go to the European Union, with the cost of non-tariff barriers expected to rise by 4-8% next year. For the British auto industry, even if a trade deal is reached, industry costs will increase by 14.1 billion pounds (1 pound equals roughly US $ 1.37).
In the field of transnational employment, it will be more difficult for British and EU citizens to find work in each other’s country. The European Union no longer automatically recognizes the professional qualifications of British doctors, architects, engineers, lawyers and accountants. Relevant staff must meet local qualification certification requirements to practice in the EU. Additionally, the new UK immigration regulations clearly require a certain level of English and salary thresholds, which can result in a shortage of low-skilled workers.
Analysts believe that financial services, one of the UK’s mainstay industries, faces greater difficulties than trade in goods. The degree of access to the financial services industry in the EU member states will not be comparable to that before Brexit. Rajneesh Narula, an international trade relations expert at the University of Reading in the UK, believes the next step for the UK is to initiate key negotiations with the EU in a number of industries related to financial services, such as banking, finance, insurance and telecommunications.
In addition, the experts noted that the current agreement adopts a deferred solution method for some contradictions, which adds uncertainty to the future.
The British government has always emphasized that after Brexit, there will be opportunities to freely negotiate and sign trade deals with other countries to create a globalized Britain. After reaching a trade agreement with the European Union, another important goal of the British government is to quickly sign a trade agreement with the United States. However, there are significant differences between the two countries regarding the specific content of the agreement. The British side is concerned about the entry of US products below EU standards into the UK and is unwilling to open up the British national healthcare system to US investors, which will create obstacles to negotiations between the two parts.
Xinhua News Agency reporter Wang Huihui Jin Jing Zhang Dailei
