UK-EU trade deal is good news, but key elements are missing, says UK expert
Source: Xinhua| 2020-12-26 02:02:25|Editor: huaxia
Professor Rajneesh Narula, the John H. Dunning Chair of International Business Regulation at the Henley Business School, University of Reading, welcomed the progress, but warned that there are difficult months ahead as many large issues are left out of the current deal, which, he said, will add uncertainties to the Britain-EU future relations.
After months of disagreements over key issues such as fishing rights and "level-playing fields", Britain and the European Union (EU) on Thursday finally agreed a post-Brexit trade deal.
Professor Rajneesh Narula, the John H. Dunning Chair of International Business Regulation at the Henley Business School, University of Reading, welcomed the progress, but warned that there are difficult months ahead as many large issues are left out of the current deal, which, he said, will add uncertainties to the Britain-EU future relations.
Key elements missing
Notably, the trade deal did little for the service sector, which makes up 80 percent of the British economy.
"Not one word has been said about services. They have kicked that ball further down the road," Narula said.
"It means that everything to do with services, that is to say banking, finance and insurance, and telecoms. These are all issues that will be negotiated in the new saga," Narula added.
According to Narula, everything from the validity of degrees and certificates is yet to be discussed and could mirror what happened in the negotiations for the trade deal.
But one thing this deal does, he said, is to reduce the uncertainty around the rules of what businesses can and can't do after Jan. 1, 2021.
"It isn't about the tariffs themselves to a lot of people, people will adjust if you give them a bunch of rules, people find a way to work with them and work around them. And that's been missing for the last four and a half years. What does Brexit mean? You know, it's a question that everyone has asked on both sides," he said.
But there is one issue that Narula foresees: There is only a matter of days to go before the document, which runs to about 2,000 pages, comes into effect after the Brexit transition ends on Dec. 31.
"We'd normally give people six months to get used to new rules, or a year. But in this time, this occasion, we're giving them exactly seven days," he said.
"There's going to be a certain amount of chaos. I think we will see queues of different types and as people suddenly realize, 'Oh, wait a minute, what does that mean for me?' And then so the next three to six months will be people going 'Oh, I didn't know that'."
From No Deal to Deal
The last week of negotiations has been tense, with both sides threatening the possibility that the outcome would be a no-deal as either team refused to budge.
Narula said that he believes that the scenes witnessed in Dover and Kent, where lorries became piled up on the border as France closed its borders to Britain due to a new coronavirus strain, may have had an influence on the negotiations.
"I think it quickened the mind a little bit. When you start thinking that this would be the normal state of affairs had there been no deal. And this kind of the gridlock that one saw in the last three or four days with COVID, and has nothing to do with Brexit, but it did give a sense of things to come," he said.
"Kind of a foreboding of the worst-case scenario. And it did quicken the mind, at least on both sides, I suspect, that nobody wanted to see that kind of chaos," Narula said.
Observers have also pointed out that the sheer weight of the EU in British trade would oblige both sides to seek a deal.
The EU is Britain's largest trading partner. In 2019, Britain's exports to the EU were 294 billion pounds (397.3 billion U.S. dollars), accounting for about 43 percent of all British exports, according to figures published by the British Parliament. Britain's imports from the EU were 374 billion pounds, about 52 percent of all British imports.
Meanwhile, Britain is the EU's third largest trading partner in goods, following China and the United States.
Future of Europe
What the new agreement has brought into question is how this will impact European geopolitics, the EU and its member states going forward.
Some political commentators have said that if countries dissatisfied with the union saw Britain leaving with a deal, it could inspire them to do the same.
But for Narula, he thinks the opposite.
"What has become glaringly obvious is leaving is an incredibly costly business. It's there for all to see, what are the costs of exiting the EU and making any sort of agreement, what it has done, if anything, it has strengthened the union, nobody wants to go through this messy divorce," he said.
"It has made it very clear that the EU as a unit has survived this and therefore can survive pretty much anything," he said.
With the trade deal, it does bring to the end the period of existential uncertainty that Britain faced as it slowly puttered its way out of the harbor of EU negotiations.
As 2020 ends, and with it the bitterly long UK-EU negotiations, what comes next is the new year of 2021, which will see how the British government is trying to sell a new "Global Britain" in the post-Brexit world.
But for many, there is still uncertainty over what this Britain will look like, where it will go, now it is alone at sea.
"It's the first time in history someone has gone from the free trade agreement to a less free trade agreement. And voluntarily," Narula said.
"In this day and age, everyone's going in the other direction. That is to say, everybody wants to have freer trade. But the UK has insisted on less free trade. And that's what we have," he added.
