Brexit Will Not Impact Free Trade, But Free Movement of People

Brexit EU Britain
Credit: Tumisu / Pixabay

British Prime Minister Boris Johnson said that Britain has taken back control of its laws, borders, and fishing waters, after the UK and European Union (EU) have finalized the long pending Brexit deal, just 7 days before the deadline. The UK and the EU have also reached a comprehensive ‘Canada-style’ free trade deal worth as much as £660 billion a year.

What is a ‘Canada-style’ free trade deal? The EU’s agreement with Canada, called the Comprehensive Economic and Trade Agreement, or CETA for short, came into force in 2017. CETA is not a ‘zero-tariff, zero-quota’ deal, but almost near to it. It gets rid of most, but not all tariffs on goods traded between the EU and Canada. Tariffs remain on poultry, meat and eggs. It also increases quotas (that’s the amount of a product that can be exported without extra charges) but does not get rid of the quotas altogether. However, it does little for free trade in services. CETA protects EU ‘geographical indications’, meaning for example that you can only make Parma ham in Italy and camembert cheese in France, and Canada can’t import something that calls itself camembert from any other country. CRTA also allows professional qualifications to be recognized both in Canada and the EU, making it easier, for example, for architects or accountants to work in both places.

UK exported £291 billion worth of goods and services to other EU countries in 2018, which was 45% of all UK exports. It imported £357 billion worth of goods and services from the EU, which was 53% of all UK imports in 2018. UK and EU are inter-dependent for trade and Brexit should not have closed the borders for such a mutually beneficial trade. So, the UK and the EU have reached a ‘fair and balanced’ trade deal to avoid such a grim scenario.

“A deal that will protect jobs across this country, a deal that will allow UK goods and components to be sold without tariffs and without quotas in the EU, a deal that will allow our companies to do even more business with our EU friends” Boris Johnson said about the trade deal. The Brexit trade deal essentially means that EU will not slap huge World Trade Organization (WTO) tariffs on up to £660 billion a year of UK trade.

But, the Brexit trade agreement with the EU has been ripped apart by Fishing for Leave, the group which represents UK fishermen, which said it appeared to be a ‘pretty dismal deal’ for Britain’s long-suffering fishermen. The fishing group’s list of key demands includes a demand for the allocation of quota to be based on zonal attachment, with 60 percent of quota caught by EU boats in UK waters going to UK boats. There was intense haggling over fishing rights, a sensitive issue, between UK and EU negotiators, even though the fishing sector makes up just 0.1% of Britain’s GDP.

Currently, fish quota allocations for each country of EU are defined under the Common Fisheries Policy, which is based on historic catch allocations. The UK fishing community demanded to allocate quotas on a new zonal approach which would have drastically limited how much fish EU boats could catch in the UK waters. The Brexit trade deal states that British vessels will be entitled to catch around two-thirds of quota in UK seas, up from the current half of the fish in UK waters under the Common Fisheries Policy. But under the terms of the trade deal, the current arrangement regarding fishing quota will be phased out over a five-and-a-half-year transition period.

Yet, everything from passports to pet travel, to driving and living abroad, will change for Brits and EU nationals after Dec. 31 — despite a Brexit trade deal being agreed between the UK and EU. Brits will no longer have the right to live and work in the EU countries. From Jan. 1, EU citizens will be barred from moving to the UK unless they have a job offer, earn at least £20,480, speak good English and have certain skills. The EU nationals already living in the UK must register for ‘settled status’ by June 30, 2021. To get a settled status, the EU nationals must have been living in the UK for at least five years continuously. The UK nationals living in the EU countries may need to apply for residency status in the country they are living in before June 2021.

There will be some more hits. Mobile phone users currently get free data roaming across the whole of the EU. From Jan. 1, roaming charges will be allowed to return. The Brexit also implies that from Jan. 1, EU countries will require Brits to get an International Driving License to drive in there. Currently a UK driving license is the only thing visitors need to get behind the wheel on the continent. There will be a lot of paper work for doing business. For example, even though there’s a trade deal, UK business owners will need to make customs declarations when they import or export goods to and from the EU and vice versa. The UK has also quit the Erasmus student exchange programme after the Brexit.

Britain had taken back control of its laws and borders from EU. In simple words, it is like UK separating from the EU joint family, to make a nuclear family. The separation has its pros and cons.

The views and opinions expressed in this article are those of the author.