Monday 10/25/21
BREXIT

Britain, EU forge last-minute 'historic' post-Brexit trade deal

Highlighting his disappointment, Michel Barnier, the EU's chief negotiator, said that Britain opted to not take part in the Erasmus programme and that no agreement had been set out for foreign policy, defence and development questions.

HANDOUT - 24 December 2020, England, London: British Prime Minister Boris Johnson gives a thumbs up during a video conference meeting with President of European Commission Ursula von der Leyen. Britain and the European Union have struck a historic post-Brexit trade deal just days before London was set to free-fall out of the bloc's tariff-free single market on January 1. Photo: Pippa Fowles/10 Downing Street/dpa - ATTENTION: editorial use only and only if the credit mentioned above is referenced in full
British Prime Minister Boris Johnson during a video conference with President of European Commission. Photo: Pippa Fowles/10 Downing Street.

Britain and the European Union have struck a historic post-Brexit trade deal just days before London was set to free-fall out of the bloc's single market on January 1.

The breakthrough came on Thursday afternoon after months of deadlock - just as many Europeans were celebrating Christmas - and allows both sides to swerve expensive tariffs.

While the future trading partners were visibly relieved that they finally had managed what looked increasingly impossible in recent weeks, exhaustion and frustration also showed through.

"At the end of a successful negotiations journey, I normally feel joy," European Commission President Ursula von der Leyen told a press conference in Brussels. "But today, I only feel quiet satisfaction and, frankly speaking, relief."

British Prime Boris Johnson was more triumphant.

The new deal - worth 660 billion pounds (895 billion dollars) each year - provides "stability and a new certainty in what has sometimes been a fractious and difficult relationship," he said during a televised address from London.

"People said you couldn't be part of a free trade zone with the EU without being obliged to follow EU laws," Johnson said. "We were told we couldn't have our cake and eat it."

Reiterating the European Union's strength in unity, von der Leyen said the bloc had upheld the upper hand during negotiations.

"This agreement will write history," she said, adding the EU had not given in on its key demands. "This shows that from a position of strength you can achieve a lot."

Applied provisionally

French President Emmanuel Macron echoed that "European unity and steadfastness have paid off," in a tweet, saying Europe could look forward to the future "sovereign and strong."

Next, London has recalled its parliament for December 30, but EU lawmakers and will have to scrutinize the deal and give their consent likely in the new year - meaning the agreement will initially have to be applied provisionally.

German Chancellor Angela Merkel hinted at her support for the deal, calling it "of historical importance."

And yet, from the EU's perspective, not all is reason for celebration.

Highlighting his disappointment, Michel Barnier, the EU's chief negotiator, said that Britain opted to not take part in the Erasmus programme and that no agreement had been set out for foreign policy, defence and development questions.

Nonetheless, the deal is massive, covering not just commercial relations, but also future terms for policing and justice, transport and energy cooperation.

Ultimately, after almost 10 months of high-stakes talks, it came down to fish and competition.

From the outset, the EU pushed for assurances on like-for-like social and environmental standards and on state aid, to stop British companies undercutting their own.

London argued that this stringency was excessive and that the whole point of Brexit was to "take back control" of its laws and borders.

The other major stumbling block was fisheries.

London threatened on several occasions to walk away from the table, and hopes for a deal faded in recent weeks.

Sudden movement came on Wednesday afternoon, with EU sources reporting that a solution on competition had been thrashed out.

In the final agreement, neither side is bound by the other's rules on subsidies or standards, but both have committed to general level playing field principles.

If one party feels the other has diverged in a way that is unfair, they can appeal to an independent arbitrator - crucially for the Brits, not the European Court of Justice - which can impose sanctions.

Fishing quotas

Finally, the two sides agreed on the economically tiny but emotionally charged issue of fish. After lengthy negotiations, the two sides agreed that the EU would retain 75% of its fishing quotas in British waters over the next five-and-a-half years.

The breakthrough means the closely linked partners have now finalized their turbulent divorce, four-and-a-half years after a slim majority voted to leave the EU in a British referendum.

London could have stayed in the customs union or single market, but was not willing to accept curbs on its regulatory freedom demanded by the EU.

Britain will leave both frameworks when the 11-month transition period allotted for trade talks ends next Friday.

Once viewed as a remote possibility, the prospect of a no-deal Brexit had looked increasingly likely in recent weeks. Without a deal, trade would have been subject to the minimalist tariff-reducing WTO rules.

Many prices on imported goods like food or medicine would have risen substantially and supply chains would have been slowed by new border formalities.

In 2019, half of British imports came from the EU, and two-fifths of British exports went to the EU.

The years since the Brexit referendum have seen three British prime ministers, four chief negotiators, two general elections and countless missed deadlines. 

The battle for the deal since London's official departure in January was also disrupted by the pandemic.

The British government predicted a historic 11.3% economic slump this year; researchers estimated that a no-deal scenario would have hit the British economy two to three times as hard as the Covid-19 crisis.

London also recently tasted major disruption as huge lines of lorries formed after neighbouring EU countries closed their borders in a bid to keep a new variant of the coronavirus at bay.

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