The future trade agreement between the European Union (EU) and the United Kingdom (UK) has been a topic of discussion ever since the UK voted to leave the EU in 2016. With the UK officially leaving the EU on January 31, 2020, negotiations have been ongoing to reach a post-Brexit trade deal between the two.
The EU and the UK are each other`s largest trading partners, with the trade volume between the two totaling £660 billion in 2019. Hence, reaching a trade agreement is crucial for the economies of both parties.
The negotiations have been complex, with disagreements over contentious issues such as fishing, governance, and the level playing field. The level playing field refers to ensuring that the UK doesn`t use its newfound freedom from EU regulations to gain a competitive advantage over EU businesses.
One of the main sticking points in the negotiations is fishing rights. The UK insists on taking back control of its waters, while the EU wants to maintain access to them. Another issue is the governance of the agreement, with the EU wanting to have a say in the enforcement of the deal, while the UK wants to maintain its sovereignty.
The deadline for reaching a trade agreement is December 31, 2020, after which the UK will be trading with the EU on World Trade Organization (WTO) terms if a deal is not reached. This will result in tariffs and quotas being imposed on goods traded between the two parties, leading to increased costs and potential job losses.
The COVID-19 pandemic has added to the complexity of the negotiations, with both parties focusing on managing the crisis. Despite this, negotiations have continued, albeit with virtual meetings.
The EU and the UK have made progress on some issues, such as agreeing on certain aspects of trade in goods and services. However, significant sticking points remain, and there is uncertainty over whether a deal will be reached before the deadline.
For businesses in the UK and the EU, the outcome of the negotiations will have significant implications. Without a trade deal, businesses will face increased costs and uncertainty, with some considering relocating to other countries to avoid these challenges.
In conclusion, the future trade agreement between the EU and the UK is crucial for both parties` economies, with negotiations ongoing to reach a post-Brexit deal. Find out more about the trade negotiations and their impact on businesses in the upcoming months.