[ad_1]
This Friday, January 1, 2021, marks the day on which the collaboration agreement between the European Union and the United Kingdom enters into force. It is, however, a provisional entry into force until the 27 Member States and the European Parliament approve the agreement closed before Christmas and which was approved this Wednesday by the British Parliament.
At the end of the transitional period on December 31, the United Kingdom, which ceased to be a member of the Union on January 31, 2020, is no longer integrated into the European single market and the customs union, with the result that the relations Bilaterals become framed in the political and economic association agreement formally signed this Wednesday.
Thus, a free trade agreement is in force, which took about 10 months to complete and which can be considered unprecedented. As a general rule, trade agreements are negotiated with the aim of strengthening ties, lowering barriers to the exchange of goods and, ultimately, abdicating some sovereignty. But in this case the opposite occurs, since, due to Brexit, an agreement was reached to regain sovereignty in which the relationship between the EU and the United Kingdom will be less close and where, necessarily, it will experience more obstacles.
The agreement now in force implies several changes in the relationship between the two blocks, however, it still has several issues to be defined, which are raised for future negotiations. The UK’s dynamic alignment with regard to state aid leaves many questions open and opens the door to potential conflicts in the future, while fisheries and financial services will need to be discussed in subsequent negotiation processes.
Both the EU and the United Kingdom were satisfied with the result obtained, however the outcome of this long and tortuous process was much closer to the initial claims of Brussels than to the contrary. It is that, although London has made progress in state aid and in the role of the Court of Justice of the EU, most of the economic issues have remained as Brussels wanted.
Exchange of goods
The parties agreed that trade will be exempt from customs duties on both sides of the Canal on products according to the rules of origin, and will also be free from the application of quotas (there is no limit on merchandise). However, there are many changes:
While it is true that most of the goods traded between the two blocs will not be subject to new tariffs or quotas, in some cases regulatory barriers will be imposed. Taking into account, for example, the rules of origin, the United Kingdom must certify the origin of its exports to the Community and, in the case of goods that exceed the 40% limit for the incorporation of components from third countries into the United Kingdom New customs duties may apply for their manufacture. London got the EU components to count as “made in Great Britain”.
Without a mutual recognition agreement, British regulators will not always be able to certify goods for sale in the EU, which has enormous potential to create obstacles and entropy in bilateral trade.
In terms of health and safety, the Union will require British food exporters to guarantee sanitary certificates and phytosanitary controls at border posts.
In the event of a dispute, both the Union and the United Kingdom can apply trade sanctions in accordance with the rules established by the World Trade Organization (WTO).
But if product exchanges remain practically unchanged, the same does not apply to services that, in essence, are now regulated under the rules established by the WTO.
In any case, with regard to customs duties, Brussels and London undertake to minimize customs costs for companies as much as possible.
Competition rules
The so-called “level playing field”, demanded by Brussels and one of the biggest obstacles to the agreement reached, means that the two parties will have to follow identical labor, environmental, social and tax rules to ensure the absence of undue competitive advantages.
However, contrary to what the EU wanted, there is no provision for a mechanism capable of forcing the United Kingdom to follow the future evolution of the rules in force in the European single market. It was only intended to create a mechanism that allows either party to apply sanctions when the counterpart deviates too much from the rules in question.
Dispute resolution in these cases will also not be the responsibility of the EU Court of Justice, another Brussels requirement, but rather of an independent panel. In any case, the United Kingdom is obliged to act in accordance with the Community restrictions on state aid and the two blocs are obliged to disclose the public subsidies they grant to the private sector.
Financial services
The agreement is silent on the so-called equivalence, necessary for companies operating in the “City” of London to sell their services in the European single market.
The European Commission, which decides on access to the single market, has already warned that it needs more information to be able to attribute greater equivalence. The two sides decided to negotiate a memorandum of understanding, until March, with a view to a strengthened system of cooperation in financial supervision.
The truth is that the United Kingdom will lose part of the access to the European market in this sector, which is decisive for British exports.
EU-UK Trade and Cooperation Agreement: protection of European interests, guarantee of fair competition and continuous cooperation in areas of mutual interest. Read more: https://t.co/WB0UwSOsjN pic.twitter.com/zBTSaLhYH8
– European Commission (@EU_Commission) Dec 24, 2020
Movement of people and access to professions
One of the main objectives defined by London with Brexit referred to the recovery of sovereignty in decisions on the movement of people, which the United Kingdom did not want free as is presupposed in the four freedoms inherent to participation in the single market (free movement of people, goods, services and capital).
From now on, stays of more than 90 days will require a visa, so free movement between the two blocks ends, either to live, study or work.
The collaboration agreement also stipulates the end of automatic mutual recognition of professional qualifications, so that, for example, nurses, doctors or engineers will not have access to direct and immediate recognition in the country in which they intend to work. The association agreement establishes a framework, which has not yet been developed, for the recognition of qualifications in the future.
London will apply a points-based immigration system that will determine who can live and work on British soil.
The agreement also implies that the United Kingdom will abandon the Erasmus student exchange program, and London already announces the creation of an identical program. But the rules for student exchanges change a lot.
Transport
Air, land, maritime and rail connectivity between the two blocks was guaranteed. But the agreement does not include, for example, the automatic recognition of the EU of aerospace products produced in the United Kingdom, which creates some disadvantages for the British side.
As for cargo and passenger aircraft, they will be able to operate as before, however there will be changes for long-haul trucks. Both parties are committed to managing visas and border controls effectively, especially at the UK-EU border, and in particular to speeding up the passage of truckers to avoid endless queues.
However, long-haul trucks from the UK will no longer be able to make three stops in EU countries and will now only be able to make one stop.
Fishing
It was one of the most difficult problems to solve in the talks. A five-and-a-half-year transition period for fishing was agreed and annual negotiations were planned to determine the quotas that should be defined beyond that period. During this phase, the two parties guarantee reciprocal access rights to water on each side.
In this transitional period, the EU accepted a 25% cut in its fishing quota in British territorial waters (well below the 80% originally required by London). The EU has guaranteed the right to take retaliatory measures if London does not allow the intended access to its waters.
Law enforcement, security, and dispute resolution
The association agreement maintains a broad continuity in terms of cooperation and information exchange that has prevailed until now, particularly in the areas of terrorism and serious crime, areas in which existing exchanges of DNA or passenger information are maintained.
London will cooperate with Europol and Eurojust, but will no longer be part of these entities. Furthermore, it is no longer integrated into the European arrest warrant system. And you also lose direct access to the Schengen information system. Regarding extradition procedures, there will be a legal framework similar to that between the EU and Norway.
On the other hand, the United Kingdom will remain within the European Convention on Human Rights. Thus, if Brussels considers that the United Kingdom has violated any rule of this convention, it may unilaterally suspend bilateral cooperation at the security level.
As for the controversial dispute resolution, the UK appears to have managed to get the water back to its mill. London wanted to no longer be under the jurisdiction of the Court of Justice of the European Communities and Brussels wanted this court to be in place in the UK to ensure that European consumers and businesses were not left unprotected.
The association agreement provides for the creation of “binding” dispute resolution mechanisms. The European Commission believes that these instruments will prevent practices that distort fair competition.
External policy
The UK did not want to include foreign policy in the negotiating specifications. Thus, nothing was foreseen in matters of foreign, security and defense policy, so now there is no framework that establishes common policies in the application of sanctions to third countries or in the coordination of efforts in joint military responses.
[ad_2]
