[ad_1]
It’s done, a hard Brexit was averted just before the end of the December 31 deadline. The EU and Great Britain have reached a trade agreement. What will change in economic relations with this agreement, what new regulations will apply as of January 1? An overview, from fishing quotas to customs documents for truck drivers and regulations for EU citizens in Great Britain.
What does the result mean for fishermen?
Fishing is economically almost insignificant. Still, fishing quotas in fish-rich British waters were the main point of contention at the end of the negotiations. Until now, the EU fleets have been allowed to catch a lot there, to the detriment of their British rivals. The British government was determined to change that. At the same time, EU governments like the French one feared protests from their fishermen if the concessions were too large. The agreement now states that EU fleets must gradually reduce their catches over a period of five and a half years; According to the EU Commission, the total value of catches will be reduced by a quarter. The British had initially asked for an 80 percent reduction, eventually 35 percent.
Shortly before the end of the five and a half years, London and Brussels will start new negotiations on the future allocation of quotas. If the British want to cut EU quotas further, Brussels could fight back, for example, with tariffs on fish imports from the Kingdom, according to the commission.
What about fair competition?
One of the most sensitive talking points in the months-long negotiations was the so-called level playing field: Brussels only wanted to offer duty-free access to the EU market if London agreed not to provide its companies with unfair advantages in the future, for example. , through subsidies or lax rules. The treaty now commits both parties to common principles of subsidy policy. Furthermore, companies that feel disadvantaged by UK government grant decisions can take legal action in local courts. If London ignores the principles and this has negative consequences for European companies, Brussels may fight back with punitive tariffs.
The British also guarantee not to lower existing social and environmental standards. However, if one party raises its standards in the future, the other party is not required to do the same – this was an important point for the British government. However, over the years, such deviations could leave EU companies burdened with more expensive requirements than their rivals in the UK, or vice versa. According to senior commission officials, the contract stipulates that the disadvantaged party can react with punitive fees or other measures to restore balance. There is also a dispute resolution mechanism. However, this does not foresee a role for the Court of Justice of the European Communities because this was out of the question for London.
Whats Next?
On Christmas Day, the 27 EU ambassadors will meet in Brussels at 10.30am to discuss the treaty. All governments must agree; some will have to get approval from their national parliament for this in the coming days. Normally, the decision to sign the contract would later be made at a meeting of the EU Council of Ministers, but due to Corona and limited time, the decision must be made in writing, without a meeting of ministers. At the same time, the member states would stipulate that the treaty would enter into force provisionally on January 1, that is, without the prior approval of the European Parliament. As soon as the agreement is published in the Official Journal of the EU, it will enter into force.
What about the EU Parliament?
The EU Parliament will not deal with the contract until January and could theoretically reject it. Originally, a special plenary session was planned for next week. There the deputies could have approved the contract. However, they only wanted to do that if the committees can examine the finished deal beforehand. So they set December 20 as the deadline for the contract, and it was broken.
Bernd Lange, chairman of the EU parliament’s trade commission, says MPs accepted “with great regret” that they would not be able to deal with the treaty before it came into force: “That is certainly an unsatisfactory situation, but we didn’t want that either. Taking responsibility for a situation without agreement with all ruptures, knowing that there is a treaty, “explains the Social Democratic MEP. Normally, parliament takes an average of 136 days” for a serious examination “of a trade agreement. The” postponement of the British negotiations “made careful deliberation impossible.
What is changing in terms of civil rights?
EU citizens already living in the UK can still apply for a residence permit until June 30. This entitles you to continue living and working in the UK. As of January 1, immigration to the Kingdom will become more difficult: the free movement of people in the EU will be over. EU citizens who want to settle in the UK must meet certain New Year criteria in order to immigrate. There is an income threshold that is primarily intended to prevent the immigration of low-skilled workers. At the same time, the British lose the right to live and work in all countries of the European Union by the end of the year.
Why are bureaucracy and customs controls necessary despite the contract?
The free trade agreement prevents both parties from having to introduce tariffs in accordance with the rules of the World Trade Organization. However, exporters will have to fill out customs documents and there will be random checks. This is because Britain does not want to enter into a customs union with the EU, but rather wants to pursue its own trade policy.
London can now conclude trade deals on its own that remove tariffs, for example with the US The goods could then be sold duty-free from the US to the Kingdom. However, there is no comparable agreement between the US and the EU. Therefore, the EU must ensure that products from the US are not imported into the European Union without paying through Great Britain. Therefore, British truck drivers heading to the EU are required to hand over customs documents listing what they have loaded – only UK duty free goods, or maybe also US goods which have entered the UK duty free, but for which the EU tariffs necessary? Furthermore, companies must show that their UK products are indeed British enough to benefit from the franchise. The EU will only accept products with sufficient value added and production stages in the UK as duty free UK exports.
Such bureaucracy could only be avoided if Britain were part of the EU customs area, in a customs union. That is not the case. The Kingdom is also no longer a member of the internal market. This will also require some random checks of the trucks. Because outside of the internal market, Britain no longer has to adhere to EU rules and regulations. Of course, this great freedom means that the EU can no longer automatically assume that British products comply with European standards on consumer protection and food safety.
Does the treaty help the banks?
Until now, banks, insurers and fund companies in London, Europe’s most important financial center, have been able to serve clients across the EU or open branches there without any problems. Thanks to the common internal market, the British license is recognized everywhere; no additional on-site license is required. Experts say that companies have an EU passport for their products. But with the end of the Brexit transition phase on New Year’s Eve, the kingdom will abandon the domestic market; the trade agreement won’t change that either.
The practical EU passports are no longer necessary and should be replaced in part by the so-called equivalence principle: if the EU recognizes that the regulation in a country is equivalent, that is, equivalent to the Brussels requirements, it can grant the financial companies there unhindered access to the domestic market. . Some US financial service providers, for example, benefit from these privileges. However, the equivalence rules cover fewer products than EU passports, and the Commission can collect benefits again at any time without the other country’s government being able to prevent it. Furthermore, the EU only wants to grant equivalency in areas where this is of interest to Brussels. London’s wishes don’t matter. Therefore, this equivalence procedure was not part of the negotiations for an agreement.
At the same time, the British government wants to allow suppliers from EU countries to continue doing business in the UK with equivalency decisions, but the EU market is much more important to British financial groups than the other way around. Equivalence decisions were scheduled for the end of June, but that deadline was broken. There is no new goal.
What else is regulated?
The EU and Great Britain have agreed to continue to cooperate closely in the field of security policy. This applies to the exchange of secret service information, for example for the joint fight against terrorism or in the fight against organized crime.
