Britain and the European Union finally reached a trade agreement on February 24th, 65438. The photo of British Prime Minister Johnson holding up his arms to celebrate also describes that Britain will achieve complete political and economic independence. What is the content of this agreement and how will it affect the future relationship between Britain and Europe? To put it simply, Britain and the European Union have reached an agreement of "zero tariff and zero quota" in trade, which only avoids trade according to WTO rules, but this does not mean that there are no obstacles to trade, and Britain has to bear "the pain of Britain's withdrawal from the European Union".
The picture shows that on February 24, 2008, British Prime Minister Johnson met with reporters in Downing Street to talk about the results of negotiations with the European Union.
1. Zero tariff, zero quota but non-zero barrier
According to the agreement, Britain and Europe agreed to implement "zero tariff and zero quota" in trade. At present, the EU market accounts for 43% of Britain's total exports and 565,438+0% of its total imports, which means that Britain and EU member countries can still gain advantages in each other's markets.
Although there are no tariffs and quotas, starting from 200211,Britain will no longer be a member of the EU single market and customs union, and trade between the two sides will face more obstacles, including customs rules, regulatory standards and more border inspections, which will lengthen the time needed for trade and increase costs. The British government predicts that the border inspection procedures will be increased five times than at present. In the first few days after the transition period of Britain's leaving the EU, the border may be crowded with a large number of trucks waiting to complete the inspection.
Due to the increase of trade barriers, it is believed that EU member countries that export a large number of goods to Britain will also be affected, among which Ireland, which is adjacent to Britain, is the hardest hit.
The picture shows British Prime Minister Johnson and European Commission President Ursula von der Leyen.
2. Some commodities will still be taxed.
It is worth noting that some goods may still be subject to tariffs, including most cars, because the proportion of parts and components from outside the UK or the EU exceeds the proportion required by the "rules of origin".
The Office for Budget Responsibility (OBR) previously predicted that even if a trade agreement is reached, in the long run, compared with the EU, Britain's exports will decrease, and it is estimated that 4% of GDP will be lost during the period of 15. This is worse than leaving the EU without agreement. The office estimates that if it is hard to leave the EU, it will lose 6% of GDP in the long run.
Belgian scholar Vandenbussche estimated that even if an agreement is reached, the 27 EU countries will suffer 0.38% overall economic losses and lose about 280,000 jobs.
British Prime Minister Johnson
3. Northern Ireland border issue
On the border issue of Northern Ireland, the British side reached an agreement with the European Union in early February, 65438. Northern Ireland will continue to abide by the EU single market rules and stay in the customs union, which means that Northern Ireland will not have a "hard border" problem with Ireland, but will inspect the goods arriving from Britain.
4. Five-and-a-half-year transitional period for disputes over fishing rights
In the final stage of the negotiations between Britain and Europe, fishing rights have been one of the controversial issues between the two sides. Britain hopes to "protect" its fishing waters and reduce its quota to the EU. Now the agreement stipulates that the two sides 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 transition period, the two sides will hold consultations every year.
Fishing boats in British waters
5. The number of checkpoints for population movement has increased.
After 202 1, 1, British people and citizens of EU member states no longer have the right to work and live freely in the other country, and Britain will be able to design a new immigration reception mechanism. As for Britons who want to stay in the EU for a short time, they can still pass the visa-free program. If they want to work, they must abide by different rules in different countries.
6. The entry of banks into the EU market is affected.
Financial services are not part of this trade negotiation. From 20211,British banks and financial institutions will no longer be granted full access to the EU single market, but will be replaced by a "reciprocal" system. If British banks, insurance companies or other financial companies want to enter the EU market in the future, they must first obtain "peer-to-peer" recognition from the EU.
With the conclusion of a trade agreement between Britain and Europe, the EU may be more willing to provide financial institutions in London with access to the market. However, before the agreement was reached, some financial institutions had transferred some jobs to the EU region to avoid affecting their services to EU customers, involving 7,500 jobs.