Background
On January 31, 2020, the United Kingdom withdrew from the European Union and the European Atomic Energy Community. Britain has been part of the block for 47 years, since January 1, 1973. While the UK and the EU are negotiating, the UK is still subject to the EU, the European Union Customs Union, and the European Single Market. Still, it is no longer part of the EU’s political institutions. Before the transition period ends on December 31, 2020, the UK and the EU must agree on a deal that will govern trade and other relations between the countries.
The European Union Customs Union includes all EU member states, Monaco, and – until December 31, 2020 – the UK. Trade relations between member countries are regulated by the Union Customs Code (Customs, n.d.). This Code, which came into force on May 1, 2016, was developed to simplify customs procedures, and its priorities are simplicity, service, and speed. Noteworthy, UCC’s full implementation is due by December 31, 2020 (Customs, n.d.). The Single European Market includes 27 EU member states and some other countries, including Iceland, Liechtenstein, Norway, and Switzerland (The European single market, n.d.). Agreements and bilateral treaties govern EU relations with these countries. The UK remains subject to the European Single Market laws during the Brexit transition period until December 31, 2020, as specified in the Brexit withdrawal agreement.
The single European market exists to ensure that the member countries can carry out the free movement of goods, capital, services, and labor. The new deal will have to consider a massive amount of details regarding trade relations and provide conditions no less favorable for both parties than those that exist today. It is noteworthy that the agreement on the Brexit deal is complicated by politics, personal ambitions, and government changes.
Brexit in News
Timing
With December 31 relentlessly approaching, Boris Johnson and European Commission President Ursula von der Leyen have resumed negotiations, hoping to end them by the weekend of December 12-13. However, experts doubted that an agreement could be reached quickly, hinting at further delays (Kuenssberg, 2020). In a recent post, Ursula von der Leyen stated that the deal could not be reached by the weekend (“Brexit: PM and EU say trade deal unlikely by Sunday,” 2020). Notably, the deadline was set after months of unsuccessful attempts to reach an agreement.
Content of Negotiations
At this stage, the parties discuss issues of fishing rights and rules of business competition. In particular, the EU does not want to give the UK advantage of duty-free access to European markets with no strings attached. On the contrary, the EU intends to set its standards for products, employment rights, and business subsidies (“Brexit: PM and EU say trade deal unlikely by Sunday,” 2020). Boris Johnson is trying to use the leverage of giving EU navies access to UK waters. The EU does not compromise, noting that British fishers could be deprived of access to EU markets.
In response, the UK insists on gaining more control over the business rules and practices as a sovereign state. The parties are also discussing procedures for the European Court’s intervention in future trade disputes between the UK and the EU. Noteworthy, according to the German research data, in case of a no-deal, up to 700,000 jobs in Europe may be at risk (Adler, 2020). Besides, countries will have to impose tariffs on trade, which will lead to higher prices.
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Negotiations Format
Boris Johnson once again expressed his intention to talk directly with the leaders of France and Germany, Emmanuel Macron and Angela Merkel, in the hope of gaining additional benefits. However, the EU refused the prime minister, stressing that issues that concern the entire EU should be discussed in Brussels, through the Euro-negotiator Michel Barnier; Mr. Johnson had to agree. European leaders have certainly pulled back from negotiations to comply with EU laws. German Chancellor Angela Merkel said that there is still a chance for a deal and that the EU is committed to upholding the integrity of the single market (Adler, 2020). Therefore, separate agreements with European leaders are impossible. Representatives of France at the Elysee Palace called the idea of Boris Johnson’s visit undesirable, and Emanuel Macron stressed that the European Commission is negotiating with the UK on behalf of France. The prime minister said that he accepts the position of the European leader.
Probable Outcome of Negotiations
One of the central positions of Great Britain is that its newfound sovereignty gives the chance of liberation from Brussels’ control. It means the right to establish rules and regulations for businesses, including investing decisions. On December 11, the President of the European Commission, Ursula von der Leyen, stated that she does not deny the sovereignty of Great Britain but insists on observing the rules of “fair competition” in exchange for “privileged” access to the single market, without tariffs and quotas (Adler, 2020). Therefore, the EU’s right to fish in UK waters, competition rules for the UK, and access to the single market are currently under discussion. Notably, the most important issue is how the EU and UK will enforce the agreement, including punitive measures. The deal is beneficial for both parties, in light of the trade aspects presented above and the need to harmonize social security issues, police and judicial work, handling of nuclear waste, and other matters.
Settlement of Disputes
The EU will not give the UK complete freedom, but it has found a way to develop relations by focusing on governance. In this case, if the UK, for example, changes its environmental or labor standards, the EU can take immediate action; in the event of unexpected decisions from the EU, the UK will also have the option of legislative regulation. On the other hand, the EU also wants to protect itself from excessive bureaucratization of relations (Adler, 2020). Therefore, not to become dependent on numerous official authorities and institutions, the EU is looking for an opportunity to create a balanced approach to the settlement of disputes. In particular, the EU offered to give a chance to retaliate in the event of unfair competition before the court rulings, but the UK disagreed. Nevertheless, Michel Barnier is confident that the parties will resolve this issue.
What will Change
From January 1, 2021, all UK citizens who wish to move to the EU will have to go through the standard procedures for non-EU countries. For the EU citizens entering the UK for permanent residence, a point immigration system will be applied (Kerley, 2020). Travel rules will change, new requirements for health insurance and driver’s licenses will appear. Besides, the UK will no longer make annual payments to the EU budget, and UK companies will need more documents to do business with the EU.
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Thus, this work illustrates the importance of applying international law in the field of trade relations. The UK’s exit from the EU has led to the need to create new treaties and agreements since those in force apply only to EU members. The EU and the UK have become hostages of lengthy negotiations that require careful discussion of a considerable number of sensitive issues. On the other hand, the revision of trade agreements can lead to a more profitable trade relations model for both countries, at least for the present time.
References
Adler, K. (2020). Brexit: EU leaders close ranks as no-deal talk mounts. BBC News. Web.
Brexit: PM and EU say trade deal unlikely by Sunday (2020). BBC News. Web.
Customs (n.d.). Web.
Kerley, P. (2020). Brexit: Seven things changing in January and others that remain unresolved. BBC News. Web.
Kuenssberg, L. (2020). Brexit: Trade deal now looking remote. BBC News. Web.
The European single market (n.d.). Web.