UK, EU reach post-Brexit trade agreement with days to spare | Mint
Active Stocks
Thu Feb 22 2024 15:16:46
  1. Bharti Airtel share price
  2. 1,133.80 -0.52%
  1. Tata Steel share price
  2. 145.90 1.43%
  1. State Bank Of India share price
  2. 766.85 -0.61%
  1. HDFC Bank share price
  2. 1,421.05 -1.19%
  1. Power Grid Corporation Of India share price
  2. 282.50 0.84%
Business News/ News / World/  UK, EU reach post-Brexit trade agreement with days to spare
BackBack

UK, EU reach post-Brexit trade agreement with days to spare

A vote on the accord, which will complete Britain’s separation from the bloc, may take place on 30 Dec

Prime Minister Boris Johnson’s next challenge is to prove that the UK can flourish outside the EU’s single market and customs union.afpPremium
Prime Minister Boris Johnson’s next challenge is to prove that the UK can flourish outside the EU’s single market and customs union.afp

The UK clinched a historic trade deal with the European Union, averting the threat of an acrimonious breakup and laying the foundations for a new relationship with its biggest and nearest commercial partner.

Negotiators finalized the accord, which will complete Britain’s separation from the bloc, on Christmas Eve, days before the country is due to leave the bloc’s single market and customs union.

Also Read | The global drive to reimagine capitalism

The accord struck has “resolved a question that has bedeviled our politics for decades," Prime Minister Boris Johnson told a press conference, adding that he expects a vote in UK Parliament on 30 December.

“We were told we couldn’t have our cake and eat it," the premier said when asked about the compromises that had to be made. “I’m not going to claim that this is a ‘cakeist’ treaty, but it is I believe what the country needs at this time."

“It was a long and winding road —but we have got a deal to show for it," European Commission president Ursula von der Leyen said. “It is fair, it is a balanced deal and it is the right and responsible thing to do for both sides."

The agreement will allow for tariff and quota-free trade in goods after 31 December, but that won’t apply to the services industry—about 80% of the UK economy—or the financial services sector.

Firms exporting goods will also face a race to prepare for the return of customs and border checks at the year-end amid warnings of disruption at Britain’s ports. The deal comes after three days of chaos at the main crossing between Britain and France offered a reminder of how quickly blockages at the border can choke international trade.

More than five turbulent years after a general election set off a chain reaction that would transform British politics and the country’s connections to the rest of Europe, the deal establishes a new framework for businesses on both sides of the Channel and frees the British Parliament from many of the constraints imposed by EU membership.

For Johnson, the architect of Brexit and the third prime minister since the 2016 vote to leave the EU, it marks another landmark just over 12 months after he claimed a decisive mandate from voters with the promise to “get Brexit done."

With the electorate divided, public finances battered by the covid-19 pandemic, and Scots pushing for a split from the rest of the UK, the prime minister’s next challenge is to prove that the UK can flourish outside the EU’s single market and customs union, a status that puts it behind other non-members such as Norway and Switzerland when it comes to EU access.

Businesses will still face border checks for which surveys have shown that they are unprepared, and consumers in Northern Ireland face the prospect of shortages of some goods as firms adjust to the new paperwork.

In a worst-case scenario, Johnson’s government itself has warned of a 7,000-long line of trucks, enough to stretch from the Port of Dover to the Palace of Westminster.

Sterling was up 0.3% against the dollar to $1.3533 as of 3.43 p.m. in London, having earlier risen as much as 0.9%.

Strategists say much of the optimism is already baked in, with the currency up nearly 10% since the end of June while the relative cost of hedging pound weakness over the next year is at its lowest since March.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Check all the latest action on Budget 2024 here. Download The Mint News App to get Daily Market Updates.
More Less
Published: 25 Dec 2020, 07:27 AM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App