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Trucks leaving a ferry in Dover.
Source: Gareth Fuller via PA Images
IT’S OFFICIAL – The clock has struck 11pm and the UK’s departure from the European Union has taken effect.
Brexit has dominated British politics since the country’s narrow vote to leave the bloc in June 2016, opening deep political and social wounds that still remain open.
Legally, Britain left on January 31, but has been in a stalled transition period during difficult talks towards a secure free trade deal with Brussels, which was finally closed on Christmas Eve.
The last minute trade deal between the UK and the EU made British businesses breathe with relief that a no-deal Brexit scenario had been avoided.
The deal means the UK has access to its largest export market duty and quota free, but at the end of the transition period on December 31, companies will still have to make adjustments to their operations.
The Palestinian Authority news agency looks at some of the problems they face:
Lack of preparation
Earlier this month, before the trade deal was finalized, MPs from the Commons Brexit Committee outlined concerns about the “general state of readiness” for the end of the transition period.
They said decisions had been made “too late”, business communications were “spotty at best” and “late delivery” of IT systems for customs made training and testing difficult.
Maddy Thimont Jack, associate director of the think tank at the Institute for Government (IfG), wrote on her website that the last-minute trade deal left “dangerously little time” to prepare for what it meant.
He warned that the complexity of the rule changes could cause companies to “behave illegally, by accident” if they have not misunderstood them.
Additional bureaucracy
Charles Grant, head of the think tank at the Center for European Reform, warned that manufacturers and farmers will face “cumbersome” border controls in relation to customs, VAT, plant and plant health and safety. animals.
Carriers and trade bodies representing companies in the supply chain fear that this could lead to delays and additional costs that could be passed on to consumers.
Cabinet Office Minister Michael Gove admitted that there are likely to be some “tough times” as the new agreements come into force.
Thimont Jack said that Brexit means “swaths of red tape and additional costs” for companies.
He said the lack of “general mutual recognition of conformity assessments” means that many “goods will have to be certified by the UK and EU authorities to access both markets.”
He added: “There is also no mutual recognition of the sanitary and phytosanitary regime, which means that goods of animal and plant origin will be subject to more controls at the border.
“In some sectors, including pharmaceutical, automotive, chemical and organic, there are more facilities, but for most there will be significant barriers.”
The IfG said that to qualify for duty-free market access, British products will need to meet “rule of origin” requirements and product supply chains will need to meet percentage content thresholds.
It read: “Some industries, especially food, simply will not be able to do this: Cane sugar imported from the Caribbean and refined in the UK will not qualify for duty-free access to the EU, nor will basmati rice imported from India and milled in the UK. Any meat product must contain only meat from animals born and raised in the UK or the EU. “
No mutual recognition of professional qualifications
In a blow to the UK service sector, the trade deal lacks mutual recognition of professional qualifications.
Thimont Jack said: “It will be much more difficult for many professionals to provide services in the EU, with rules that differ between member states.”
An IfG analysis said there were “an enormous number” of exceptions covering the market access provisions in the trade agreement.
For example, he said that UK citizens will not be able to sell actuarial services in Italy or construction services in Cyprus, or be surveyors in Bulgaria or tobacconists in France.
The business agreement includes limitations on activities allowed on short-term business trips without permission.
Source: Liam McBurney via PA Images
New rules on business travel
The trade agreement allows short-term British business visitors to the EU to stay for 90 days in any six-month period.
But the rules mean that activities allowed without the need for a work permit are limited to meetings, consultations, research, training, and trade shows, and variations between member states also apply.
The sale of goods or the provision of services to the public is not covered by the provisions on short-term business visits.
The UK government guide says that visas or permits may be required for business travel and advises travelers to check the rules of each country.
Potential for disagreement about the rules
London and Brussels have agreed on a floor for standards for areas such as the environment and labor rights, and this playing field will be reviewed in four years.
But Tánaiste Leo Varadkar warned that if the UK deviates too much from EU standards, its access to the European market could be threatened, saying “it is not unconditional.”
A European Commission summary of the agreement said that either party has “the right to take unilateral measures to safeguard their economies against unfair competition from the other party.”
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The document says that a “dispute resolution mechanism” covers most areas of the trade agreement, including the level playing field.
The accompanying “enforcement and safeguard mechanisms” include the possibility of reintroducing tariffs or quotas for an affected sector.
The deal contains loopholes
Two key issues that have not been resolved by the trade agreement are “data adequacy” and “financial services equivalence.”
The EU has yet to decide whether the UK’s personal data protection regime is adequate to allow the flow of information between the two parties. Restrictions in this area could affect British business competitiveness.
Interim fixes for a period of up to six months will allow data to flow until a suitability decision has been made.
There are few details about financial services, a key UK export, and it has yet to be determined whether the EU will unilaterally decide that UK laws and regulations are equivalent to its own.
The UK and the EU have committed to agreeing a memorandum of understanding on establishing a framework for regulatory cooperation in financial services by March.
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