Britain supersedes the European Union on Thursday, 48 years after joining the bloc, a significant change in the global order that will bring major changes for ordinary Britain as well.
On 1 January, decades of trade with the European Union are likely to have a large and lasting impact on the British economy, devoid of customs declarations and regulatory hurdles. The rights of a UK citizen to live, work or study in any other EU member state will also go away, indicating the extent to which the EU has reached the daily lives of its citizens. EU citizens will also lose those rights in the UK
For supporters of Brexit, including Prime Minister Boris Johnson, such costs are justified by the benefits and opportunities that will exit the European Union. Britain will promote British trade with the rest of the world and institute legislation to shape its economy and society without Brussels’ intervention, he says.
“Johnx said Wednesday during the debate on the UK-EU Free Trade Agreement that Brexit is not an end but a beginning and the responsibility rests with all of us now. Parliament.
The agreement between London and Brussels on the terms of their future relationship on Christmas Eve ran for more than 1,000 pages, areas as diverse as fishing rights and cooperation between law-enforcement agencies.
Nevertheless, some key areas of the UK’s EU arrangement with its neighbors have not yet been met, particularly the long-term basis for trade in financial services and cross-border exchange of data. The UK is the former’s powerhouse exporter, while the latter is one of the most important lubricants of global commerce.
For businesses, the curious changes on 1 January will be felt by British exporters and importers importing with the European Union. New procedures will apply to customs declarations and regulatory paperwork. Trade in goods will not be levied, but companies that import components around the world to produce goods for sale in the European Union will be required to comply with the original regulations, which specify a minimum level of foreign investment Tariffs that can avoid a finished product.
Britain has said that it will help the companies bringing goods to the UK to an extent in streamlining the passage of goods to implement the new regulations. The EU has made no such assurances, raising the possibility of delays and disruptions in cross-border trade in the bed of the new system.
The dislocation is likely to hurt economic growth, particularly in the first quarter, and throughout the year, City economists said in a research note this month. He said there was a possibility of mitigating the impact of the epidemic, which has deterred UK company managers from making the necessary preparations. In a November Bank of England survey of corporate executives, only 40% found they were fully prepared for 1 January.
Overall, Citi estimates that the disruption would reduce UK GDP by about 2% in 2021, compared to if it remained within the EU’s single market, its general regulation area and its customs area. what would happen.
If not more and more challenges from January, service firms have to face. 1. The free-trade agreement between the UK and the EU included only general provisions for trade in cross-border services that do not match the level of access available within the single market. The institute agreed a report published after an agreement to the government was agreed.
ING, a nonpartisan think tank focused on policy-making, said UK service firms would also face local restrictions based on laws that apply to individual member state non-EU firms. Professional qualifications will not always be automatically recognized, for example, and business travelers may require a visa to see customers based on the length of their stay. Neither constraint applies to professionals from EU members. Some services are completely restricted to non-EU providers.
For example, UK citizens will not be able to sell construction services in Italy or in Cyprus. The IFG report states that they will not be able to become surveyors in Bulgaria or France’s Tobaconists.
Most UK-based financial-services firms will not be able to provide services to EU customers from 1 January, pending a so-called “equivalence” decision by the EU on the extent of market access that has yet to be made. However, the Bank of England said in November that major UK banks, insurance companies and asset managers had already set up major EU subsidiaries so that there would be no interruption in their EU operations.
The UK Treasury has given temporary permission to EU firms to offer a number of financial services to UK clients, but the EU has only done so to clear some financial assets through UK exchanges. European Union officials have said they cannot provide a timeline to give the UK financial services sector equivalence, although both sides have to establish an agreement on cooperation on financial regulation by the end of March.
Data is another outstanding issue. Firms will still be able to individually shuffle personal data on the UK-EU border. 1, up to six months. The European Union has said it will decide on whether UK laws meet its standards to allow continued movement of data in the first few months of 2021.
Brexit will change trade inside the UK as well, to avoid the need to rebuild customs on the island of Ireland, Northern Ireland remains in effect in the EU customs territory and the single market. This would require a greater number of checks on products moving from the British mainland to Northern Ireland.
For British families, 1 January will bring change. Tourists with British passports will no longer be able to use fast-track lines with automated gates at airports for EU citizens. Those traveling to EU destinations will have the chance to shop duty-free – but will face new restrictions on how much wine they can buy. The EU cap on some cellphone charges will no longer apply, with higher prices for international calls and texts likely.
British students will face higher fees and access requirements to study at EU universities. And pets, who can travel freely with their owners across the block under an EU pet passport program, enter the EU country from 1 January to issue them a clean bill of health Veterinarian is required.
– Lawrence Norman in Brussels contributed to this article.
Write Jason Douglas at [email protected]
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