Brexit Deal Done, UK Now to see if it can work

LONDON – For tired Brexit negotiators on both sides of the English Channel, the Christmas Eve trade agreement sealed 11 months of laborious deliberations over Britain’s departure from the European Union, including details that Archon’s form In which species of fish can be caught by boats on each side. British water.

But for many others – among them bankers, businessmen, truck drivers, architects and millions of expatriates – Christmas was only the beginning, an unexpected day of high-stakes and a tight web of commercial ties to Europe to unstitch. Experiment.

The dealClosing the book on Britain’s growing partnership with Europe so far has opened a new one, which according to analysts will be the biggest change in modern commercial relations overnight.

In the four years since Britons voted to forge a half-century of relations with Europe, many migrants have stopped moving to Britain for work and British firms have shifted staff to the continent of Paris and Frankfurt Sent for But for all those preparations, seven days are now all that stand between businesses and on 1 January there is an avalanche of new trade barriers.

“We learn that we need to learn how we go,” said Shane Brennan, CEO of Cold Chain Federation. “Let’s hope it gets better in the end, but it will be slow, complicated and expensive.”

British distributors, spared disaster No deal different, Was still scrambling to allow its meat, fish and dairy blocks to be sold to produce the first of hundreds of new export certificates. British food, once exempted from such cumbersome checks, now faces similar oversight as European imports from countries such as Chile or Australia.

Britain’s service sector – not only London’s powerful financial industry, but also lawyers, architects, consultants and others – largely survived the 1,246-page deal by sector. 80 percent Of British economic activity.

The deal also did little to assimilate European migrants, some of whom left Britain during the epidemic and are now struggling to determine whether to establish the right to settle in Britain before Partition on 31 December They need to run back.

“As of January 1, the landscape changes, and the security blanket of the transition period is gone,” said Mike Bohn, co-founder of the3million, Which supports European citizens in Britain, fears Europeans will be unfairly denied jobs and rent apartments amid confusion over rules. “There is apprehension, and also astonishment.”

Negotiators have not formally published the voluntary trade deal, although both parties have offered summaries, making analysts and ordinary citizens unsure of some details, even UK and Europe jurists Prepare to vote on it in a few days.

But it was clear for a long time that the agreement would offer the city of London a center for international banks, asset managers, insurance firms and hedge funds, Some assurance about future business in the English Channel. The UK sells about 30 billion pounds, or $ 40 billion in financial services, to the European Union every year from an integrated market. Easy to sell services from one member country to another It is compared to selling services from one US state to another.

The new trade deal smooths the flow of goods across British borders. But this leaves financial firms without the biggest benefit of EU membership: the ability to easily provide services to customers in the region from one base. It has long permitted a bank in London to provide loans for a business in Venice, or trade bonds for a company in Madrid.

That is harm Particularly painful for Britain, Which ran a surplus of £ 18 billion or $ 24 billion on trade in financial and other services with the European Union in 2019, but a loss of £ 97 billion or $ 129 billion on trade in goods.

Former director of the institute Tom Kibasi said, “The result of the deal is that the European Union has retained all of its existing benefits in trade, particularly with goods, and the UK loses all existing benefits of trade.” For Public Policy Research, a research institute. “The result of this trade negotiation is exactly what happens with most trade deals: the big party gets what they want and the small rollovers end.”

The agreement to allow goods to cross the tariff limit ensured that the most important supplies throughout Europe – namely, food and medicine – were accessible. It was also easy to strike a deal on goods; Looking at country-by-country financial regulations, such as how much money banks should hold, most trade agreements skirt the service industries.

But Brexit was not mostly a trade agreement: it was erecting barriers within the European market, not taking them down, which is unusually entrenched.

After 1 January, the sale of services, once assured, will be hung on patchwork decisions by European regulators over whether the UK is close to its own to rely on new financial regulations. Although London’s expertise is difficult to counter, placing its financial and service firms in a strong position to weather the storm, some obstacles are unavoidable. Already, Britons living in Europe have bank accounts in the UK Where their accounts will be closed.

“Imagine if you moved to the UK and you moved it to Canada, or Australia,” said David Serra, CEO of Algebris Investments, an asset management company with offices across Europe. “This is what services do. Britain has become the third country. “

In announcing the trade deal this week, UK Prime Minister Boris Johnson admitted that it is not “as much for financial firms” as “we would have liked.” Analysts said he was not as direct about the difficulties faced by British retailers under the deal.

Promising that there were “no non-tariff barriers” to selling goods after Brexit, he ignored tens of millions of customs declarations, health assessments and other investigations, for which businesses would now be responsible.

Industry experts said Britain is short of customs agents required to deal with those documents, and even veterinarians have conducted health checks. And in recent times, European truck drivers have received an alarming preview of havoc by a few days of shipping delays when they were stranded at British ports due to travel restrictions associated with the new Coronovirus variant.

“It’s a big problem, going at a cost of millions of pounds and euros,” said Alex Altman, a partner in Brexit-related issues in accounting and tax practice Blake Rothenberg. “At the end of the day, it’s going to be passed on to consumers.”

For European citizens living in Britain, the completion of a Brexit deal left little doubt about how the country’s new immigration rules could complicate their lives. Migrants have been allowed to apply for the so-called “settled status” in Britain. But some provisions have been made for those who cannot complete the online process, much less for those who do not feel they need permission to live in the country where they have lived for decades.

Robert Ford, a professor of politics, said, “There is a possibility of a crisis in the next one or two years about EU migrants, who were already here, and had been here for a long time, but fell through the cracks of the registration scheme.” . ” At the University of Manchester.

The limits of the Brexit deal reflect the fact that even in recent years there has been more complex increases in financial and other regulations, trade deals have struggled to keep pace, said David Hennig, the European Center for International Political Economy An analyst of.

Analysts said the UK limited the deal in some key areas, making the emergence of a bare-bones agreement almost inevitable.

Ahead of the no-deal split, involving heavy logjams on borders and deep uncertainty for businesses, the agreement was a saliva. But even with such a deal, the way forward is uncertain.

“Brexit was always going to be a long run in UK competition,” said Mr Kibasi, analyst. “But the way it plays hurt investment in the UK, so it’s a slow puncture, not a quick crash.”

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