Dec 30, 2020
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Brexit, or two victories on the same battlefield

The race for results in negotiations between London and Brussels on Brexit ended on December 24 with the announcement that the free trade agreement, which defines the relationship between the UK and the European Union after the “divorce”, has finally been adopted. Both sides applaud themselves: British Prime Minister Boris Johnson says: “Everything that was promised to the British in the 2016 referendum and the general election has been realized in this deal … We have regained control of our money, borders, laws, trade and our fishing waters … We signed the first-ever treaty with the EU based on zero tariffs and quotas … This is the largest bilateral deal signed by the parties, it regulates trade, the volume of which was 668 billion pounds in 2019 “… In a word, victory.

Ursula von der Leyen

In Brussels, the President of the European Commission, Ursula von der Leyen, also claps his hands, scattering in gratitude to his team, which for four years butted with London over how much compensation he needs to pay. She said that the EU was speaking from a position of strength in the negotiations, as a tough gap would hit the 66 million UK harder than the 450 million EU. You have to understand that this is also a victory.

However, there are no two victories on the same battlefield.

It is worth recalling that since April 2017, when the main provisions of the EU negotiating strategy on Brexit were approved in Brussels, the European Union has offered the UK to pay about 60 billion euros for the violation of European unity first. “To fulfill financial obligations”, and then raised the bill to 113 billions. And only after this “calculation for sins” expressed his readiness to discuss Brexi further.

However, the UK government agreed to pay only 45 billion euros. Closing London’s free entry to the single European market, Brussels banned EU countries from holding separate negotiations with Great Britain, announcing that the conditions for maintaining access to the single European economic space are indivisible. However, a trade agreement was signed that would keep the British free access to the single European market.

The hottest point of the negotiations, which was discussed until the last day or even an hour, is the quotas for fishing in British waters for the EU countries. Brussels was ready to return 18 percent of these quotas to London, with the right to revise them only after 10 years.

Boris Johnson defiantly brought warships to the North Sea to protect fisheries and defended 25 percent of fish catch quotas, with the right to revise after 5.5 years. Then Brussels will have to prove the right to do more. In general, the British press testifies that Boris Johnson had 28 key controversial issues in the deal, while Ursula von der Leyen had only 11.

The signed trade agreement is not quite usual, says Economist… It does not imply closer trade ties, but rather requires independent arbitration to ensure that trade relations between the UK and the EU are equal.

Britain categorically rejected the EU’s requirement to follow EU rules in the provision of state subsidies, labor protection, technological and environmental requirements for production. “To prevent British firms from gaining an unfair advantage in competing on the continent”… And as a result, the European rules were forgotten, a special mechanism was created in which the parties receive the right to respond with duties on specific goods if their supplier is made easier by subsidies, benefits or reduced requirements for working and production conditions. At the same time, not the European Union court, but the arbitrator must give permission for the application of tariffs to compensate for losses.

Zero tariffs and a free trade agreement, visa-free travel, balanced access to markets and maritime resources and a lack of foreign policy and defense commitments to the European Union cannot but be considered a great success for Boris Johnson. However, there is one “but” … All this concerns trade with the European Union in goods, which account for only 20 percent of the UK’s GDP, while services, primarily financial, provide 80 percent. First of all, we are talking about the banking industry. For UK banks, insurers and brokers, access to the EU market will be incomplete at best, but this is the subject of the next scramble between London and Brussels. The EU has yet to work out the conditions for regulating financial services. Equally urgent is a decision on free data transfer, which is a critical component of modern cross-border business. The adopted agreement does not contain a word about the mutual recognition of the qualifications of professional services. And for Northern Ireland, which remained in the single European market and customs union, the introduction of border and customs controls in the Irish Sea does not solve the problem of maintaining the country’s territorial integrity, but only exacerbates it.

In addition, the 2,000 pages trade agreement is yet to be ratified. Boris Johnson does not need to worry too much after he initiated early parliamentary elections, in which the ruling Conservative Party won by bringing 365 out of 650 MPs to the lower house of parliament. …

The European Parliament, which will not meet this year, is another matter. In addition, all 27 member states must approve the agreement in the EU. It is difficult to say whether they will do this, and in January a no deal situation may well arise, that is, “no deal”, which will create problems with border crossing and administrative confusion on both sides of the English Channel.

So far, one thing is clear: on January 1, 2021, a customs border will appear between Britain and the European Union, with all the attendant bureaucracy, costs and confusion.

Cover photo: REUTERS / POOL New

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