UK has completed its exit from the EU as the transition period ended on Thursday 31st December at 11 PM. Brexit trade deal agreements were moved into the country’s law through the Queen’s signature. The EU Future Relationship Bill won 521 votes in the House of Commons against 73 and the Queen has also given her final consent, known as Royal Assent. Boris Johnson made the final announcement by signing the new Trade and Cooperation Agreement with the EU
Brexit came with an immediate effect of terminating the free movement of over 500 million people between the UK and 27 EU nations. A lot of things will be changed after 1st January 2021 but some things between the two partners will remain the same. After four and a half years of British referendum to take the UK out of EU, both sides reached the following trade agreement in a speedy process:
5 Points In Brexit Trade Deal Agreement
UK left the EU in Brexit on 31st January 2020 but was forced to follow EU rules regarding trade. Commons and Labor supported the new deal but Liberal Democrats, Democratic Unionist Party, and SNP voted against it. Critics have raised several concerns about the agreement. It failed to address fishing issues, security issues, and border issues with Northern Ireland and Gibraltar. Originally the purpose of Brexit was for the UK to regain control of its laws, economy, borders, trade, and fish.
However, both parties can hit back whenever they feel like the other is gaining an unfair competitive advantage. The deal sets new rules for UK and EU to co-exist, trade, and work together after separation. When the UK was in the EU, companies faced no taxes and limits on the trade quantity.
UK Leaving Single Market And Custom Unions
The UK managed to sign a good Brexit trade deal with its main trading partner. The EU court will no longer be involved in settling trade disputes with the UK. By doing so it has protected its treasured 4 freedoms of the single market: goods, services, people, and capital. Of course, it means new restrictions and limitations for the UK but it does grant freedom to the UK from the EU’s set of complex rules.
No Tariffs on Goods and Services
Both agreed on a free trade agreement and can continue trading goods without tariffs and quotas. This is the first time the EU has offered zero tariffs and zero quotas for any outside nation. This protects the jobs of hundreds of thousands of people working in in-between the UK and EU. Reportedly, it will also save around 890 billion USD in annual trade.
However, companies will face new bundles of cost and paperwork, including documents for customs declarations and border checks. The whole process will become slower which has already enraged some traders on both ends. Reportedly, it could take up to 6 months for the UK to clear the payment check. If the businesses are not prepared or submit incomplete paperwork, the delays can create severe problems for traders in the beginning.
Few freight companies in the UK have suspended their services to the EU. Uncertainty is rising in different sectors such as the service industry. Services from the EU has captured 80% of the UK’s economy and many details regarding such issue are not published yet.
25% Qouta On Fishing Waters
Fishing is seemingly a very small part of the UK and EU’s economy but carries huge political symbolism. It was one of the major sticking points due to which the deal was getting delayed. However, now both sides have agreed that 25% of the EU’s right to fish in UK waters will be moved to only the UK’s fishing units. EU boats are allowed to fish for a few years but the UK will keep the greater share.
The document also mentioned different species of fish which will be the UK and the EU during the transition. There is also a chance of import taxes on British fish when exporting to any nation in the EU. UK can totally stop EU boats from fishing after 2026. Currently, the share allocation for the EU is 47.03% and UK 52.97% for 2021. The share is expected to change after 5 and a half years to EU 43% and UK 57%.
No EU Court Of Justice Jurisdiction For UK
Some fundamental legal changes will affect the relationship between the UK and the European Court of Justice (ECJ). As ECJ is no longer a top court for the UK, it cannot proceed against Britain for not complying with EU obligations. UK will lose its power to appoint judges in the ECJ but it will still remain the final court of law for EU companies.
The deal allows the EU to retain nearly all of the benefits from trading with the UK. However, it surrendered its ability to use regulation in selecting the areas where the UK had trading advantages in the past. This was the key demand of Brexit supporters so UK’s trade can be free from EU laws. Northern Ireland, on the other hand, did not abandon EU rules so ECJ will continue over there.
There will be import charges on some goods in the future if either side violates product standards.
Visa Renewal Rules
Freedom of work and life between the UK and the EU also came to an end. From this year on, British nationals will now need a visa to travel and stay in the Schengen area for more than 90 days in a 180-day period. Following the Brexit trade deal, these things must be considered before planning to travel:
- There must be at least six months left on the British passport to travel
- Travel insurance covering health
- The current EHIC card is valid till expiry but will need to be replaced with a new government scheme in the future
- Free-roaming on mobile phones has ended. UK visitors might have to pay roaming charges to their service provider if they use their phone in the EU
- Pets are no longer allowed to travel on the current pet passport. Visitors need to obtain an animal health certificate from the vet at least 10 days before travel.
- Separate lanes have been created on the border control for EU, EEA, and Swiss citizens
Having left the EU, the UK is free to set its own trade policy and make its own deals with other countries. Currently, it talking to the US, New Zealand Australia, who do not have any free trade deal with the EU right now.