Sunday, March 26, 2023

UK finally concludes Christmas Eve trade deal with EU

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After four and a half years of uncertainty, tense negotiations and missed deadlines, the UK officially struck a trade deal with the European Union, after voting to leave the bloc in June 2016.

The Christmas Eve deal was announced mid-afternoon in London, after the two sides reached agreement on the last major sticking points over fishing rights for European ships in UK waters; Other long-standing sticking points were competition for UK companies in the EU and trade regulations for electric cars.

The UK government, announcing the deal, took a victorious note, saying the deal meant the UK had “regained control of our money, our borders, our laws, our trade and our waters. fishing ”. The deal will also mean the end of free movement, which has allowed EU citizens to live and work in the UK without restrictions, and vice versa.

“This means that we will have full political and economic independence on January 1, 2021,” the government said.

Speaking at a press conference immediately after the announcement, European Commission President Ursula von der Leyen said the negotiations had been “a long and winding road, but we have a lot to show”. Rather than happiness, she said she felt quiet satisfaction and “relief.”

“To all Europeans, I say it, it’s time to put Brexit behind. Our future is made in Europe ”, she declared.

While the final concessions ultimately appeared to come from the UK, the deal crucially preserves tariff-free trade between the bloc and Britain. The deal has yet to be ratified by the British Parliament, probably next week, and then by the European Parliament, in the new year.

The successful deal avoids the risk of a so-called “no deal” Brexit on January 1, where the lack of trade deals would have led the UK to fall back on WTO trade standards. The prospect of such a fallout – which was a looming prospect for years – raised the possibility of a sudden shutdown or delays in daily trade across the border with France, which could even jeopardize supply. in fresh products and medicines.

The chaos that such a shutdown could cause has been made painfully evident over the past week, after France closed the border with the UK due to a mutation of the COVID-19 virus in the south east from England, leading to days of truck delays and raising concerns about a shortage of Imported Christmas food from continental Europe. Delays were still ongoing as of Thursday as truck drivers waited for COVID-19 testing.

There remains a lot of uncertainty over the UK’s future, however, and the deal is unlikely to spell out in detail how financial services will be run: a major concern, given the UK economy’s dependence on screw of the banking sector in London.

This round of trade talks had lasted nine months, occurring alongside the chaos of the COVID-19 pandemic, which has often distracted the British public and European governments from the task of mapping what a post-Brexit relationship will look like.

But few people, let alone British Prime Minister Boris Johnson, who had been a leading advocate for the country’s split from the EU, expected the divorce to be so complex, messy and lengthy. duration that it turned out. While the announcement of a deal has prompted sighs of relief, the process has already taken its toll: at the end of 2019, before the pandemic and already more than three and a half years after the vote, the companies described Fortune the impact of uncertainty: loss of business, fluctuating messages and changes in how and where to invest.

European companies have also had years to prepare for a post-Brexit relationship, which has been extremely thin in detail.

A very British split

When news arrived that Britain had voted to leave the EU arrived on the morning of June 24, 2016 – a surprise result that shocked pollsters, pundits and even, apparently, the government that hosted the referendum – it was a sign that the political winds were shifting globally. Coming just months before the election of US President Donald Trump, the referendum result was a shocking rebuke to the country’s ruling political elites and their ability to read the country’s mood.

The result was also deeply symbolic at the national level. The preparations for the vote itself were carried out with a strong emphasis on the themes of Britishness, immigration, sovereignty and identity, which contrasts sharply with the technocratic feuds that will follow in the following years. And the vote itself was sharply divided based on age, region, wealth, and political orientation, as well as across the UK’s four countries: England v Scotland. ; the younger generation against the older Britons; the rich South against the post-industrial North.

The results of the vote also shattered the country’s political landscape, dividing the ruling conservative party into those who wanted to stay in the EU and those who wanted to stay. Theresa May, the Prime Minister until the summer of 2019, was herself in favor of staying in the EU before the task fell on her to organize a divorce; Johnson, who finally reached the top post on his promise to ultimately ‘Get Brexit Done’, found the negotiations no easier despite his support for the separation. His promise – now finally fulfilled – helped him win a general election last December, transforming traditionally Labor Tories in the north of England, a historic change.

But while the Brexit saga has produced a lot of drama – fears of last minute splits; political evictions; lie to the queen; and fears that divorce may again ignite tensions in Northern Ireland– the last four years have also often swung between absurdity (a misguided play, designed to mark the “official” day of the split on January 31, for example), and the drudgery of crafting a deal in which Britain had little real leverage to dictate terms or demand concessions.

Throughout the talks, Johnson and other Brexit hardliners have insisted that ‘no deal’ is better than ‘a bad deal’. In the end, Britain got “a fair deal,” which reflects the very uneven power dynamics between an island nation of 67 million and a large continent with 448 million. As to whether this is really what the British envisioned when they voted to leave the EU over four years ago, only time will tell.

More political cover of Fortune:


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