The trade agreement between the United Kingdom and the European Union welcomed relief for businesses, the departure from the prospect of punitive tariffs and a chaotic negotiation of the week as Britain’s largest trading partner.
However, the agreement leaves major problems unresolved or danger of flaring up again. Here, the Brexit agreement could cause problems in the future:
Equal playing field
An agreement on the so-called equal playing field, which creates the conditions for fair competition between companies, was one of the thorniest parts of the negotiations. The agreed compromise means that the UK does not have to comply with EU laws, but the group can impose proportional tariffs, subject to arbitration, if it can show that Britain’s actions have distorted fair competition.
This means that the demand for levies on trade in the UK has not yet been resolved and that it is a living matter. One of the main arguments of the campaign to leave the bloc was that Britain would “take back” its own laws, and members of Eurosceptics of Boris Johnson’s Conservative party called on the prime minister to seize the opportunity to lower regulations.
The agreement also contains a review clause that makes it possible for both parties to renegotiate this part of the treaty from time to time if they are dissatisfied with its use. The trade agreement could therefore still collapse in future if the United Kingdom or the EU decides that it will not succeed.
Finance
The deal offers little clarity for financial businesses. There is no decision on the so-called equivalence, which allows companies to sell their services in the European market of the city of London. The agreement only contains standard provisions regarding financial services, which means that it does not include market access commitments.
Johnson told the Sunday Telegraph the agreement “may not go as far as we’d like” on financial services. In a rare acknowledgment, his strategy in the talks fell short.
The Treasury must negotiate a memorandum of understanding with the EU as an urgent priority in 2021, and London will continue talks with Brussels on access and equivalence of financial services, Finance Minister Rishi Sunak said on Sunday.
Data
The United Kingdom and the EU have just agreed a temporary solution to allow data to flow between their areas. For an interval of not more than six months, data may be transferred until a separate legal agreement has been reached.
EU officials said a so-called data adequacy decision, which would confirm that UK data protection standards are comparable to the blockchain, could be taken in early 2021.
Fish
The Brexit trade agreement includes a five-and-a-half-year transition period for fisheries, during which British fleets will see a lifting equal to 25% of the catch previously caught by EU boats in British waters. Thereafter, access will be subject to annual negotiations.
The agreement gives both the UK and the EU the right to levy taxes on each other’s fish if it can show that any future reduction in access to water could cause economic or social damage.
There was a furious reaction from fishermen to the compromise, with the National Federation of Fishermen’s Organizations describing it as a ‘betrayal’. Fishing was a total issue in the Brexit campaign and they will put pressure on the British government to draw a hard line when the next talks take place.
Gibraltar
The United Kingdom and the EU have yet to reach an agreement on Gibraltar, the British territory connected to mainland Spain. Without an agreement, crossing the border can be more difficult, which can cause long queues for commuters and significant economic disruption. About 15,000 workers cross the border every day.
Any attempt by Spain to defend or even end British control of the territory has long led to conservative lawmakers, including former leader Iain Duncan Smith, and they will fight hard to prevent the UK from granting concessions. .