The historic UK-EU divorce agreement was announced on Christmas Eve.
A new post-Brexit era opens up in the relations between the two parties, changing what we knew for the last many years.
Let’s have a look at some economy-related areas and how the landscape is shaped on the basis of the agreement reached:
Trade
The deal ensures that trading will not be burdened by import tariffs or quotas on imports or exports, but a series of new border regulations “for all goods which comply with origin regulations” will be put in place.
Under this approach disruptions in production chains, which could potentially cause serious issues in several sectors (e.g. car industry), are avoided.
Of course, customs control at the border will apply, leading to higher costs. Controls on food and animal imports in particular will be stricter.
Competition
The two parties undertake to respect the level playing field, maintaining high levels of protection in many sectors including carbon emissions pricing, social and labor rights, tax transparency and government subsidies.
However, the possibility of taking corrective measures is foreseen (e.g. imposition of customs duties) if one of the two parties does not comply with these obligations.
Transportation
The connection of the British Isles by air, road and rail with mainland Europe is ensured, but with only a few of the benefits that the UK enjoyed as a member of the single market. British airlines will have wide access to routes to European destinations, but will not be able to connect destinations within the EU.
The UK will need bilateral agreements with EU member states to begin transporting goods outside the EU (e.g. to US, via UK and vice versa).
Restrictions will also apply for British motorists in terms of the European destinations they can cross for the transport of goods. The same applies for European motorists in Britain.
Aim of these regulations is to avoid undermining the rights of passengers and employees, as well as transport safety.
Travel – Work
UK citizens will be able to visit the Schengen area without a Visa for 90 days.
A new mechanism is created for the necessary healthcare coverage of travelers.
Work and residence in other countries will require permits from national authorities.
Professional qualifications obtained in the UK by lawyers and accountants will not be recognized in the EU and vice versa.
Financial services
The operation of financial firms in the market depends on whether they will have secured a special regime. However, citizens will be allowed access to bank accounts from both sides.
The agreement has also provisions for many other areas such as fishing, research and innovation programs, judicial cooperation, data transfer etc.
Cooperation on foreign policy, security and defense is not covered by the agreement, because the UK did not wish to negotiate on such issues.
If a party fails to comply with the agreement, a dispute resolution mechanism will consider the matter, as in most trade agreements, without the EU Court maintaining any right to intervene in this process.
The agreement stipulates that for all of the above a well-defined arrangement will be put in place in the coming months or even years for the implementation details.
Under the agreement reached, Northern Ireland will remain in the EU internal market and customs union.
