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Friday, December 25, 2020
“Sigh of relief”
The Brexit trade pact will bring changes
This agreement was fought for a long time. Now, just before the end of the year, the 2000-page agreement between Britain and the EU has been signed. It remains to be seen what consequences this has for individual industries. One thing is clear, however, the treaty brings a number of changes, on both sides.
Following the historic agreement on a Brexit trade pact, analysis of the treaty is in full swing. The economy in particular will be closely watched. Representatives from all sectors welcomed the agreement. The German-British Chamber of Commerce and Industry (AHK) in London spoke with a “sigh of relief.” But the very short time it takes to rummage through the thick document is cause for concern. Chancellor Angela Merkel had already recognized the agreement as historic.
The EU and Britain agreed to a trade pact on Thursday after months of fighting. On the EU side, however, the treaty can no longer be ratified in time, but is only applied provisionally. Therefore, to make the necessary preparations, the German Council Presidency convened a meeting of the EU ambassadors on Friday. On the British side, the government has announced that it will be referred to Parliament on December 30.
German MEP David McAllister was optimistic about the expected ratification of the agreement in the EU Parliament. “We have a political responsibility to avoid an unregulated transition and to keep negative consequences for citizens and businesses as low as possible,” said the CDU politician, who is also a Brexit representative in the EU Parliament, in a interview. with “world”. According to him, the agreement can be applied initially without the consent of Parliament. But this “should not set a precedent for future trade deals.”
AHK boss Ulrich Hoppe warned that the economy had to adapt to “deep changes” despite the deal. “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 director general of the BDI industry association, Joachim Lang, stressed: “An agreement is better than no agreement.” However, the pact still means additional red tape and unnecessary border paperwork for most businesses.
Rapes are inevitable
“Many companies will violate 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. “The agreement comes too late for companies. Working with 2,000 pages of text in a few days and identifying the consequences is difficult,” he said.
The contract is intended to reorganize the relationship between the two parties as of January 2021. The most important point is to avoid tariffs, allow unlimited trade in both directions and limit 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. Business representatives from both sides had warned of disruptions and the loss of tens of thousands of jobs in this case.
Satisfaction on both sides
The head of the EU Commission, Ursula von der Leyen, and the British Prime Minister, Boris Johnson, were satisfied. “With the agreement we are creating the basis for a new chapter in our relations,” Chancellor Merkel said.
British associations were also relieved. “Given that four fifths of UK food imports come from the EU, today’s announcement will elicit a collective sigh of relief from consumers across the UK,” said BRC Director Helen Dickinson. The Food and Beverage Manufacturers Association FDF warned against cheering too quickly. “We will wait with the celebrations until we have verified the details,” said FDF chief Ian Wright. He criticized that the industry only had four business days to adapt to the new rules.
According to economists, the British economy in particular would have been hit hard by a so-called no-deal Brexit. But even with a deal, some industries are threatened with a distinct disadvantage. “The Brexit deal may slow down the collapse, but after a short recovery after Corona, England will have to cope with a new gradual decline in its auto industry,” said auto expert Ferdinand Dudenhöffer.
Border controls and end of student exchanges
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 at the request of dpa. “With us, Britain remains in the EU tariffs, just as Switzerland is already included,” said a Deutsche Telekom spokesman.
The head of the EU Commission, von der Leyen, called the agreement fair and balanced. “And it was a matter of common sense for both parties,” added von der Leyen. The EU was in a very good negotiating position and fully safeguarded its interests. Now the community can finally leave Brexit behind.
Prime Minister Johnson made a similar statement in London. “I think it is good business for all of Europe,” he said. From the point of view of your government, the agreement has achieved everything British public opinion wanted with the Brexit referendum in 2016. “We have regained control of our money, our borders, our laws, our trade and our fishing grounds” the government said. At the same time, the agreement guarantees exemption from customs duties and unlimited exports to the EU. Britain voted in June 2016 with a narrow majority to leave the European Union.
The worsening corona pandemic in Britain had recently increased the pressure. After a mutated variant of the coronavirus was discovered, France temporarily closed its borders to trafficking from Britain. That is why thousands of trucks got stuck on the British side, from the critics’ point of view, a preview of the situation in a no-deal Brexit.
