THURSDAY, March 28, 2024
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UK, EU must make swift progress in critical Brexit trade negotiations

UK, EU must make swift progress in critical Brexit trade negotiations

After the start of next year, the EU and Britain will begin negotiations on post-Brexit trade matters.

The date of Britain’s exit has been set for March 29, 2019. Considering the time needed for approval procedures by the European Parliament and the British Parliament, the two sides aim to conclude their negotiations by end of October next year.
It is most important to create a framework of trade issues. If Britain withdraws from the EU without a future vision, Europe will fall into confusion and the global economy will be adversely affected.
Reaching an early agreement is indispensable for Japanese and other foreign companies operating in Britain to formulate their European strategies. Since it will take several years or longer to conclude a trade pact, a transition period will be established to allow Britain to provisionally remain in the EU’s single market. The EU side has said the period should end “no later than the last day of 2020”.
Nine months have passed since Britain sent notification of its withdrawal to the EU. But the pace of negotiations is slow. This is due to the continued confrontation in the British administration between “moderate Brexit” supporters who attach importance to access to the EU market, and “hardline Brexit” supporters who seek the restoration of sovereignty, including rigorous immigration control.
Britain has not come up with a clear policy to enter into trade negotiations with the EU.
The EU’s chief negotiator has indicated the view that a free trade deal similar to the one it has with Canada is the only option. This is because this can realise immigration restrictions that Britain is calling for as a “red line” on which it will not compromise.
Under a free trade agreement, non-tariff trade between Britain and the EU can be expected. However, financial institutions based in Britain will face restrictions on their activities in the EU, thus leading to reduced competitiveness for the City of London. The EU negotiator’s view is apparently a proposal based on the reality that Britain cannot leave the EU without paying a price.
It was difficult to reach a consolidated position on the British side regarding the country’s financial obligation to the EU budget – a prelude to trade negotiations. Finally, Britain conceded to the EU to a great extent and agreed to pay its financial obligations for 2019 and 2020. The amount is not disclosed, but it is estimated to be on the 5 trillion euros level. Britain and the EU have agreed to protect the current rights of EU citizens living in Britain and those of Britons living in the EU.
It also took time to coordinate opinions on control of the border with Ireland. In the June general election, the ruling Conservative Party lost the majority in the Parliament, and the Conservatives now have non-cabinet support from a Northern Ireland regional party.
The regional party has rejected draft agreements with the EU and the border issue has been put off.
For the post-Brexit negotiations to achieve results, Britain must make the necessary preparations and formulate a post-Brexit vision immediately.

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