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Early last week United Kingdom and European Union have resolved the last knots which prevented the parties from reaching an agreement on the Brexit front. A negotiating success, also due to the good offices of the President of the European Commission, Ursula von der Leyen, which allowed London and Brussels to avoid the scenario of a single agreement just days after the end of the transition period.
The witness now goes to the respective parliaments, and Westminster is expected to meet tomorrow, Wednesday 29 December, to definitively approve the text agreed by the negotiators. However, no further effort for European MPs, whose ratification is not expected before January.
But what does the trade agreement between the European Union and the United Kingdom do? Below is an overview of the post-Brexit scenarios.
Brexit: work is still ongoing on the financial services front
Years of negotiations on the Brexit front have resulted in a folder of over a thousand pages that repeats the elements on which the European and British negotiators managed to find a synthesis. However, the need to conclude the agreement before the end of the transition period has led the parties to maintain some gray areas.
Financial servicesFor example, they are not fully covered by the text delivered by the London and Brussels negotiators. The parties, from what we learn, will continue to work towards a Memorandum of Understanding (MoU) By next March: The European Union’s ambition is to return a large part of British financial activities, especially bond trading, to an onshore regime.
In this sense, there is a certain degree of frustration in the financial circles of the City of London, with Boris Johnson himself expressing his doubts about the validity of the agreement. Downing Street is especially disputed the excessive attention paid to the fishing sector during the negotiations, a segment of the economy that has an almost irrelevant weight for the British coffers.
Equal conditions and fishing rights integrated in the agreement
However, a summary was found in the level playing field, or that mechanism that will prevent the United Kingdom from competing unfairly with the European Union. The main fear of the Brussels leaders in the negotiation was to see some kind of Singapore rise over the Thames in the post-Brexit: for now, London will be able to maintain its rules and standards, but in case of need the EU could respond by applying specific tariffs.
However, also on this front, the parties have yet to take some crucial steps. Compliance with the rules on equality of conditions, in fact, can only be guaranteed with the establishment of a specific authority, but progress is expected on this front only in the coming months.
More generally, the text defined by the negotiators is relevant the main concessions of the United Kingdom compared to the European Union: between these the irish question, a chapter that had politically crushed former British Prime Minister Theresa May. In the post-Brexit period, Northern Ireland will in fact be seen as a kind of extension of the EU, and British goods shipped to Belfast will be treated as imported goods.
London also gave up fishing rights, namely, access to the waters near their respective coasts for British and European fishing vessels. As mentioned above, this knot was not of strategic importance to the British economy, with Boris Johnson only determined to retain some degree of power in the negotiations. The signed agreement provides for a transition period of five and a half years. in which fishing vessels will be able to continue operating in accordance with pre-Brexit rules, but with a 25% reduction in quotas.
Finally, the tariff system that would have accompanied the United Kingdom to the single market in the event of not reaching an agreement has been avoided, but British citizens lose the ability to move freely within the European Union.
