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The economy responds with relief to the trade pact between the EU and Great Britain. However, experts fear additional bureaucracy, unnecessary border formalities and that trade could be partially paralyzed.
Business representatives had repeatedly warned about the failure of the Brexit negotiations. Relief from the trade agreement concluded by representatives of the EU and Great Britain was even greater. However, the mood remains depressed. The concerns about the consequences of the deal are too great.
The director of the German-British Chamber of Commerce and Industry (AHK), Ulrich Hoppe, warned that the economy had to adapt to “profound changes” despite the agreement. “From the first day after the Brexit transition phase, trade in goods and services will become more expensive and in some cases may even stall as a result,” Hoppe said.
The general manager of the BDI industry association, Joachim Lang, also emphasized: “The agreement is better than no agreement.” However, the pact means additional bureaucracy and unnecessary border paperwork for most companies.
Little time to read
The very little time left to read the entire document is also a cause for concern. “Many companies will violate the regulations because they are not yet familiar with the new flood of rules,” said York-Alexander von Massenbach of the British Chamber of Commerce in Germany from the dpa news agency. “The agreement comes too late for companies. Working on 2,000 pages of text in a few days and identifying the consequences is difficult to achieve,” says von Massenbach.
The trade pact is scheduled to enter into force in January
The EU and Britain agreed to a trade pact on Thursday after months of fighting. The contract aims to regulate the relationship between both parties from January 2021 onwards. The most important points in this are avoiding tariffs, allowing unlimited trade in both directions, and limiting friction losses as much as possible.
Britain left the EU at the end of January but remains a member of the EU internal market and the customs union during a transitional phase of Brexit until the end of the year. Without an agreement, more complex customs duties and controls would have been necessary. In this case, business representatives from both sides had warned of the loss of tens of thousands of jobs.
Reactions to the deal have also been mixed among British associations. The deal “will cause a collective sigh of relief from consumers across the UK,” said BRC Director Helen Dickinson.
By contrast, the Food and Beverage Manufacturers Association FDF cautioned against applause too quickly. “We will wait with the celebrations until we have verified the details,” said FDF chief Ian Wright. He also criticized the industry for not having enough time to adjust to the new rules.
In the future, EU citizens will need a passport to enter the country.
The departure from Britain also has serious effects on other areas of life. Starting in October 2021, EU citizens will need a passport to enter Great Britain. Furthermore, the London government will withdraw from the EU Erasmus student exchange program. However, there will be no additional roaming charges, as announced by German mobile network providers. “With us, Britain remains in the EU tariffs, just as Switzerland is already included,” said a Deutsche Telekom spokesman.
Today, the EU chief negotiator Michel Barnier will brief the representatives of the EU member states on the agreement reached with Great Britain at an extraordinary meeting of the EU ambassadors. On the EU side, at least the governments of the 27 member states must approve the outcome of the negotiations. The aim is for the agreement to enter into force provisionally on January 1, when Britain also leaves the EU internal market and the customs union. Ratification by the European Parliament should take place retrospectively in early 2021. In Britain, parliament has to give its approval, which will be revoked from the winter holidays on December 30.
