commerce the agreement between the United Kingdom and the European Union was welcome ease for businesses, avoiding the prospect of punitive tariffs and a chaotic break-up without the agreement of the UK’s largest trading partner this week.
However, the agreement leaves major issues either unresolved or likely to be triggered again. Here’s where the Brexit deal could cause problems in the future:
Level playing field
An agreement on so-called a level 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 law, but the bloc can impose proportionate tariffs, subject to arbitration, if it can prove that UK actions have distorted fair competition.
This means that the issue of trade taxes between the UK and the EU is still far from being resolved and is a real issue. One of the central arguments of the campaign to leave the bloc was that Britain would “take control” of its own laws, and Eurosceptic members of Boris Johnson’s Conservative Party called on the prime minister to seize the opportunity to reduce regulations.
The agreement also contains a “review” clause that allows either party to renegotiate this part of the treaty on a regular basis if they are not satisfied with the way it is used. The trade agreement could therefore collapse in the future if the UK or the EU decide that it is not working.
Finance
The agreement provides little clarity to financial firms. There is no decision on so-called equivalence that would allow companies to sell their services in the EU’s single market in the City of London. The agreement contains only standard provisions on financial services, which means that it does not include market access commitments.
Johnson told the Sunday Telegraph that the agreement “may not go as far as we would like” on financial services, in a rare admission, his strategy in talks failed.
The Treasury is set to 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 for financial services, Chancellor Prosecutor Rishi Sunak said on Sunday.
data
The UK and the EU have agreed on only one temporary solution to maintain the flow of data between their territories. For an interim period of up to six months, the data may be further transferred until a separate legal agreement is concluded.
EU officials said the so-called data adequacy decision, which would certify that UK data protection standards are comparable to those of the blockchain, could be taken in early 2021.
Over
The Brexit trade agreement contains a five-and-a-half-year transitional period for fishing, during which British fleets will increase by 25% of the catches previously caught by EU vessels in UK waters. After that, access will be subject to annual negotiations.
The agreement gives both the United Kingdom and the EU the right to levy reciprocal taxes on fish if they can demonstrate that any future reduction in access to water causes economic or social damage.
There was an angry response from fishermen to the compromise, with the National Federation of Fishermen’s Organizations describing it as a “betrayal”. Fishing has been a totemic issue in the Brexit campaign and will put pressure on the British government to lead a hard line when the next talks take place.
gibraltar
The United Kingdom and the EU have not yet reached an agreement on Gibraltar, the British territory connected to mainland Spain. Without an agreement, crossing the border could be more difficult, which could cause long queues for commuters and significant economic disruption. About 15,000 workers cross the border every day.
Any attempt by Spain to erode or even end British control of the territory has long raised the concerns of Conservative MPs, including former leader Iain Duncan Smith, and they will fight hard to stop Britain from making concessions.