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Britain calmly starts a new life of Brexit

Brexit, this is not over.

by YCPress

Brexit, this is not over. After many delays and twists and turns, the UK and the EU finally reached an agreement on future relations at the end of 2020.

On December 30, 2020, the House of Commons of the British Parliament passed the “Brexit” trade agreement between Britain and Europe by 521 votes in favor and 73 against, according to Bloomberg.

According to the BBC, British Prime Minister Johnson said on social media that the agreement will bring certainty to Britain’s business, tourism and investment trade after January 1, 2021.

When Britain struggles to cross the end of the “Brexit” marathon, will certainty come? Public opinion is full of worries. Where Britain will go next is still a proposition to be solved.

“Imperfect” agreement

In the last few days of 2020, the United Kingdom quickly pushed forward the “Brexit” process, which some British media said was “necessary”.

According to the British Guardian, the agreement reached between Britain and Europe is 2,000 pages long, covering European and British trade in goods and services, investment, competition, taxation, transportation, energy, fisheries and other aspects.

“We have regained control over our funds, borders, laws, trade and fishing waters. The agreement is a dream news for families and businesses across the UK.” Johnson confidently said that Britain had received all the benefits he hoped.

Johnson’s statement is more like a kind of relief. For British society under the cloud of the epidemic, the high economic and social costs of no-deal “Brexit” are unbearable, but the agreement “Brexit” is not perfect, and some key issues are still pending.

In the field of fisheries where the two sides have been seriously divided, Britain and Europe agree that EU fishermen can still fish for seafood in British waters under the current quota for five and a half years after the end of the Brexit transition period, with a value of 650 million euros a year. However, after five and a half years, this quota will be reduced by 25%.

This is regarded as a “great concession” by British industry, because the first condition offered by the UK is to reduce it by 60% after three years. According to the agreement, the two sides will negotiate fishing once a year after 2026.

Analysis points out that the United Kingdom is currently the world’s largest net exporter of financial services, of which more than 40% of exports are to the EU.

The agreement involves little financial services industry, one of the pillar industries of the UK, which may have a major impact on the British financial industry.

Rajnish Narula, an international business relations expert at the University of Reading in the United Kingdom, said that the next step for the UK must focus on negotiating with the EU on everything related to financial services, including banking, finance, insurance and telecommunications.

According to sources, the British government has scored 65 key issues involved in the Brexit agreement negotiations. The results show that the British government won 28, the European Union won 11, and the two sides compromised on 26 issues.

Cui Hongjian, director of the European Institute of the China Academy of International Studies, analyzed in an interview with our reporter that the final agreement reached by Britain and Europe is a complex mechanism of balance and staggering restrictions, and is the result of compromise between the two sides.

The agreement appears to have a holistic framework and principles, but the topics in different fields are relatively independent and have their own set of rules.” In some key areas, the two sides have reached the so-called “gentleman’s agreement” for the time being, and some disputes have not been fully resolved, but are temporarily controlled for subsequent negotiations.”

“sequelae” cannot be ignored

Scotland recently shouted “independence” again as the British government cheered for the “Brexit” agreement. According to German newspaper Le Monde, Sturgeon, the chief minister of the Scottish Government and leader of the Scottish National Party, said on social media that no agreement can compensate for the losses caused to Scotland by Brexit.

“it is time to plan our future as an independent European country”. Analysts said that the relevant content of the Anglo-European agreement related to agriculture and fisheries made Scotland dissatisfied and would further intensify Scotland’s independence to some extent, which is a prominent problem in a series of “Brexit” sequelae.

In the field of trade, some international investors have also expressed concern that the smoothness of trade between Britain and Europe is not the same as that of Britain’s stay in the EU single market, and that greater trade barriers will further reduce the attractiveness of the UK to becoming a participant in the cross-European supply chain.

In a note, the European Commission pointed out that although no-deal “Brexit” has been avoided, enterprises will still pay a lot of money for “Brexit”, such as exporters will face additional border checks and paperwork. According to the British government’s Office of Budget Responsibility, the British economy will shrink by 4% in 15 years compared with staying in the EU in 15 years.

In the automotive industry, some analysts believe that even if Britain and Europe reach a “Brexit” trade agreement, it may still cause losses to car manufacturers. Some automakers, including Nissan, may have difficulty obtaining the eligibility to export some models assembled in the UK to the EU duty-free.

David Bailey, professor of business economics at Birmingham Business School, said that the “Brexit” agreement reached is “insignificant” compared with the significant impact and costs that the automobile industry will face, and the flexibility in the implementation of the policy remains to be examined.

Cui Hongjian believes that after the “Brexit” agreement is reached, Britain will face at least four major challenges in the future:

First, the implementation and enforcement of the agreement. Despite the so-called “win-win arrangement”, all parties are uncertain about the specific direction of British and European trade.

Second, domestic political issues

Once the trend of Scottish independence continues, the centrifugal tendencies in Northern Ireland, Wales and other regions may increase, and Britain’s unity and sovereignty will be challenged.

Third, the issue of changes in the international situation. Compared with the “Brexit” referendum held in 2016, the international situation has changed dramatically today.

Britain’s foreign security policy in recent years has served the “Brexit” strategy, which lacks long-term and strategic to some extent. After that, whether Britain can clearly define its position and come up with policies that truly meet British interests and world trends will test the ability and wisdom of the British government.

Fourth, the issue of economic recovery. A “Brexit” agreement has avoided the worsening of the British economy, but the British economic recovery still faces challenges. At present, the UK fiscal deficit is rising sharply, and the post-Brexit trade and investment turn will need a period of buffer.

It is not easy to achieve “global Britain”

After the “Brexit” referendum four years ago, Britain put forward the idea of “Global Britain” and was committed to building an extroverted, inclusive and supportive globalized country for free trade.

At present, facing the severe epidemic and the heavy pressure of the economic recession, how far is Britain from this goal if it wants to break up with the European Union?

According to Johnson, “We will be completely free politically and economically from January 2021.” In the view of Peter Kellner, a visiting scholar at the Carnegie European Center, Britain’s relationship with the continent is complex, and no matter how perfect the “Brexit” agreement is, it may not be able to straighten out their relationship with each other.” On the road from an ally to a partner, there is a lot of adjustment and running-in between the two sides. From this perspective, this is not the end of ‘Brexit’, but the real beginning.

For some time, bilateral trade negotiations have become one of the key elements of the UK’s international strategy.” After the Brexit agreement is reached, Britain should further advance the pace of bilateral trade negotiations.

At present, the United Kingdom is actively negotiating post-Brexit trade agreements with major trading partners such as the United States, Australia and New Zealand, but progress is relatively slow.

In October 2020, the United Kingdom and Japan officially signed the Comprehensive Economic Partnership Agreement, which is the first major trade agreement signed after Brexit.

However, Britain and Japan trade account for only 2% of Britain’s foreign trade, which is far more symbolic than the real gains. In November 2020, the United Kingdom and Canada reached a continuing trade agreement to ensure that the trade relations between the two countries remain stable after the end of the Brexit transition period. The two countries also agreed to start negotiations on a new trade agreement from 2021.

Cui Hongjian pointed out that after the UK leaves the European Union, the concept of “global Britain” is at greater risk to some extent. On the one hand, as a single sovereign country, Britain’s influence in regional foreign and security affairs and economic and trade affairs is diminishing, and it does not have the strength to participate in the competition of great powers in the short term.

On the other hand, there is concern among domestic public opinion in Britain that after leaving the EU, Britain may further afflide to the United States for its own security, strengthen coordination between the United States and Britain, and “hand over the sovereignty brought back from Brussels to Washington”. In this case, the goal of “Global Britain” will be impossible to talk about.” This is two major tests for Britain. Whether the ‘global Britain’ can be achieved is still unknown.