Neither Prime Minister Boris Johnson nor his chief negotiator David Frost could oppose it: in their songs praising the new trade agreement with the EU, the two emphasized the “new relationship between sovereignty”. That, too, is the declared goal: to shower the chains of the federation and be self-determined again.
But Johnson and the Brexiters’ celebration of “the last step of a long journey” brings them British A short way to where they were before – with free trade with much of the continent. In particular, it is about the 1000 page agreement that will regulate trade in the future. The European Parliament approved the largest deal on Wednesday.
This means that the agreement, which has been in effect provisionally since the beginning of the year, is expected to take effect on May 1. Trade between Great Britain and the European Union is free of charge and unlimited. However, the new restrictions on crossing the border are, for example, food standards or, for example, British products actually made there.
The collapse of the Brexit trade is worse than expected
But while both parties applaud the deal, it is clear elsewhere that the damage is long overdue. Endless trucks in Dover earlier this year were a sign of new problems. In fact, the exit hit many companies harder than expected. A study by the British Chamber of Commerce (BCCG) and KPMG in Germany found that two-thirds of 93 companies said the effects of the new trade rules were more negative than expected.
“As the Chamber of Commerce, we expected Brexit to lead to a sharp decline in trade. The current situation is beyond that,” commented BCCG President Michael Schmidt.
According to Schmidt, the results are a “clear warning signal” – meaning “another level of expansion in the context of ongoing unresolved issues between the two countries.” The new trade agreement does little to change that. “This agreement cannot be an alternative to the Internal Market and Customs Union,” the German foreign trade firm GDAI insisted. In fact, the negotiations were due to “build trade barriers without being removed”.
For example, goods are obligated only if they appear in the EU. In practice, this means that a machine made in Germany built in another EU country and passed quality control here cannot be exported without duty to Great Britain – because a link in the value chain was outside the Federation of States.
The next trade ban will come later this year
In addition, according to the GDAI, this agreement does not provide for the mutual recognition of standards “for industrial products or food”. Great Britain still offers a transition period, but exporters in the EU will have to overcome another hurdle from the end of the year. As such, some foods must have the appropriate health certificate for export. For other products, on the other hand, you must switch from the CE quality label to the UKCA label, which is only valid in Great Britain.
For these reasons, companies always incur additional costs – they are sometimes too large and doing business on the island is no longer worthwhile. In addition, as Bloomberg points out, this agreement does not mean that any fighting between the EU and the United Kingdom will end. London and Brussels are still debating how the deal will be implemented on the Irish-Northern Irish border. Relationships were affected by the risk of a vaccine export ban, which could affect UK deliveries.
Finally, it is also true that the EU has already issued a warning in accordance with the agreement. Otherwise, the head of the commission, Ursula van der Leyen, warned on Tuesday that the EU would take action: We do not want to use these tools, but we will not be ashamed of them if necessary. “
“There is a threat of tension in the future”
What is an important “last step” for Johnson, therefore, does not mark the end of all Brexit difficulties. Accordingly, the agreement was ignored in the financial markets. Leading index of the UK FTSE 100 While the European stock market advanced moderately in the middle of the week, the British pound did not change against the euro.
“Irregular Brexit was prevented without agreement. But be warned [der EU] It also shows that tensions will continue to rise in Great Britain in the future, ”wrote Andy Briefke, a forex expert at Commercebank. According to the analyst, these tensions “with the real impact on Britain’s foreign trade and the long – term effects of Brexit” are dangerous for the pound.