Brexit Blog: A deal done - but much unfinished business

Brexit illustration creative concept, Flying balloon with European Union EU and United Kingdom UK fl

The Brexit deal was cause for celebration - but it's the start of a process, not the end of one and there is much unfinished business still to be resolved - Credit: Getty Images/iStockphoto

In the latest of our weekly Brexit Blogs, Paul Briddon of Lovewell Blake welcomes the EU/UK trade deal, but says there is plenty still to be done. 

Exporters of goods, and businesses generally, will have heaved a huge sigh of relief on Christmas Eve when the trade deal between the European Union and the UK was announced. This avoids the worst possible outcome of trading on World Trade Organisation terms, which would have put tariffs and quotas on British exports to the remaining 27 EU members. 

This was rightly portrayed as good news. But suggestions that this trade deal puts to bed all of the outstanding issues are wide of the mark. It is likely to be the beginning of a protracted – perhaps permanent – state of negotiations between the UK and the EU. 

The good news first.  Tariff- and quota-free trade for goods, no dual-certification requirements (including food and animal produce, so important for our region), freedom of movement for business travellers with no need for visas for trips of up to 90 days. 

However, exporters using components sourced from outside the EU could still face tariffs on goods due to ‘Rules of Origin’ – this could impact sectors such as car-making in the future. 

There are also big holes still to be plugged. The greatest of these is services, which make up 80pc of the British economy and are not covered by the deal. There is still no agreement on mutual recognition of professional qualifications for example, or clarity on passporting for the financial services sector. 

Another important omission is data. The deal does not provide the adequacy agreement that would allow information to flow freely between the UK and customers in the EU, which is vital in an increasingly connected world. There is an interim solution under which the UK will effectively be rule-takers from Brussels; but this will run for no more than six months. 

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For agriculture and food producers, which faced potentially the most stringent tariffs, the deal is a big win; for fishing, the 25pc of quota that will be gradually returned to the UK fleet is less than the industry hoped for, but maintaining free access to EU markets for their catch is probably more important. 

There is a commitment to provide businesses with clear and accessible information, but no timeline so uncertainty seems set to continue for a while. 

Overall, this deal is a big relief, but hopes that a comprehensive trade-deal would be ‘done and dusted’ by December 31 look to have been optimistic. There is definitely unfinished business, with much more still to be negotiated. The Brexit circus is set to rumble on. 

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