How much do you think the UK will be affected by the Brexit negotiations between EU countries?

As EU countries negotiate Brexit, how much do you think the UK will be affected?

The United Kingdom and the European Union finally reached a trade agreement on December 24. The photo of British Prime Minister Johnson raising his arms in celebration also described the United Kingdom as being able to achieve full political and economic independence. What exactly is the content of this agreement, and how will it affect the future relationship between Britain and Europe? To put it simply, the UK and the EU have reached a "zero-tariff, zero-quota" trade agreement, avoiding trade only in accordance with WTO rules. However, this does not mean that trade has zero obstacles, and the UK will also have to bear the "pain of Brexit."

The picture shows British Prime Minister Johnson meeting reporters in Downing Street on December 24, describing the results of negotiations with the EU

1. Zero tariffs and zero quotas but not zero obstacles

After the agreement was reached, Britain and the EU agreed to "zero tariffs and zero quotas" in trade. The EU market currently accounts for 43% of the UK's total exports and 51% of its imports. This means that the UK and EU member states can still gain advantages in each other's markets. .

Although there are no tariffs and quotas, the UK will no longer be a member of the EU single market and customs union from January 1, 2021. There will be more obstacles to trade between the two sides, including customs rules, regulatory standards and More border inspections will lengthen trade time and increase costs. The British government has expected that border inspection procedures will increase five times compared with the current level. In the early days after the expiration of the Brexit transition period, the border may be filled with a large number of trucks waiting to complete inspections.

Due to increased trade obstruction, EU member states that currently export a large amount of goods to the UK are believed to be affected as well, with Ireland, which is close to the UK, being the hardest hit.

The picture shows British Prime Minister Johnson and European Commission President von der Leyen

2. Some goods will still be taxed

It is worth noting that some goods may still be taxed. The tariffs are imposed on most cars because their proportion of parts sourced from outside the UK or EU exceeds the proportion required under "rules of origin".

The British government’s Office for Budget Responsibility (OBR) previously predicted that even if a trade agreement is reached, British exports will be reduced in the long run compared to remaining in the EU, and it is expected to lose 4% of GDP in 15 years. This is less than a no-deal Brexit, and the office estimates that a hard Brexit will cost 6% of GDP in the long run.

Belgian scholar Vanden Busche estimates that even if an agreement is reached, the 27 EU countries will suffer an overall economic loss of 0.38% and lose approximately 280,000 jobs.

British Prime Minister Johnson

3. Northern Ireland border issue

On the border issue in Northern Ireland, the UK and the EU reached an agreement on the content of the relevant agreement in early December. A consensus has been reached that Northern Ireland will continue to abide by the EU's single market rules and stay in the customs union, which means that Northern Ireland will not have a "hard border" problem with Ireland, but it will perform inspections on goods arriving from the UK.

4. Five-and-a-half-year transition period for fishing rights disputes

In the final stage of negotiations between the UK and the EU, fishing rights have been one of the contentious issues between the two sides. The UK hopes to "protect "Own fishing waters and reduce quotas given to the EU. Now the agreement stipulates that the two parties will have a transition period of five and a half years. The EU will continue to fish in British waters, but the fishing quota will be reduced by 25%. After the expiration of the transition period, the two parties will negotiate annually.

Fishing boats in English waters

5. Increased population movement barriers

From January 1, 2021, Britons and citizens of EU member states will no longer have With the right to work and live freely in other countries, the UK will be able to design a new mechanism for accepting immigrants. As for British people who want to stay in the EU for a short period of time, they can still go through the visa exemption program. If they want to work, they must abide by different rules in each country.

6. Impact on banks’ access to the EU market

Financial services are not part of this trade negotiation. From January 1, 2021, British banks and financial institutions will no longer have full access. The rights of the EU single market have been replaced by a system of "equivalence". In the future, if British banks, insurance companies or other financial companies want to enter the EU market, they must first be recognized as "equivalence" by the EU.

As the UK and Europe reach a trade agreement, the EU may be more willing to provide London financial institutions with opportunities to enter the market. However, before the agreement is reached, some financial institutions have transferred some jobs to the EU region. To avoid affecting services to EU customers, involving 7,500 positions.