Tuesday, December 29, 2020
Fifteen talking points on Boris Johnson's Brexit deal
Over at the Mirror there has been some further analysis of the 1200 pages of the deal the Prime Minister signed with the EU. Some of it may appear trivial but all of it is actually very important for our future relations with the world's biggest free trade bloc. This is what they discovered:
1. British farmers face a sausage ban on selling into the EU
British chilled mince and sausages will be banned from being exported into the EU after January 1, with government guidance to British businesses, updated on December 28, bluntly saying "you will not be able to export" chilled mince, chilled raw sausages, ungraded eggs or some unpasteurised milk into the EU.
2. Fishing boats are facing 'betrayal'
The Prime Minister boasted his 1,246-page pact would make Britain an “independent coastal state with full control of our waters”. He said it would hand around 25% of the value of the EU’s current catch in UK waters back to UK fishermen by summer 2026. But the small print of his deal reveals changes in quotas vary dramatically depending on which species is being caught in which part of the sea. The UK share of cod West of Scotland will soar from 69.8% to 81.2% by 2026 - taking back 38% of what EU boats currently catch in the area. But the UK will only take back 4% of the EU’s catch of sole in the Western Channel, off the coast of Cornwall
3. The whole deal could come crashing down after four years
A No10 spokesman said: "If the UK or EU does not believe the system is working fairly, either side will have the ability to bring the agreement on trade to an end. “The UK and EU would then trade on Australian-style terms.” This means having no Brexit deal at all. There are several ways the deal could be terminated. Those include if either side decides to terminate the agreement on fishing, the rest of the trade elements of the pact would come crashing down as well.
4. Erasmus is coming to an end
The UK has quit the Erasmus student exchange programme after Brexit, complaining it is too “expensive”. The scheme allows UK university students to study abroad in one of 32 participating nations. Some can get a “large contribution” to their tuition fees back in the UK as well as a grant of up to €350 a month.
5. You'll still need travel insurance - despite a health deal
Brits have been warned they must still get full travel insurance for trips to the EU from January 1 - despite the deal. The 1,246-page agreement says Brits can continue to get emergency healthcare while on holiday, like they can under the European Health Insurance Card. People’s current EHICs will continue to be valid until they expire. They will then be replaced with a UK Global Health Insurance Card (GHIC).
1. British farmers face a sausage ban on selling into the EU
British chilled mince and sausages will be banned from being exported into the EU after January 1, with government guidance to British businesses, updated on December 28, bluntly saying "you will not be able to export" chilled mince, chilled raw sausages, ungraded eggs or some unpasteurised milk into the EU.
2. Fishing boats are facing 'betrayal'
The Prime Minister boasted his 1,246-page pact would make Britain an “independent coastal state with full control of our waters”. He said it would hand around 25% of the value of the EU’s current catch in UK waters back to UK fishermen by summer 2026. But the small print of his deal reveals changes in quotas vary dramatically depending on which species is being caught in which part of the sea. The UK share of cod West of Scotland will soar from 69.8% to 81.2% by 2026 - taking back 38% of what EU boats currently catch in the area. But the UK will only take back 4% of the EU’s catch of sole in the Western Channel, off the coast of Cornwall
3. The whole deal could come crashing down after four years
A No10 spokesman said: "If the UK or EU does not believe the system is working fairly, either side will have the ability to bring the agreement on trade to an end. “The UK and EU would then trade on Australian-style terms.” This means having no Brexit deal at all. There are several ways the deal could be terminated. Those include if either side decides to terminate the agreement on fishing, the rest of the trade elements of the pact would come crashing down as well.
4. Erasmus is coming to an end
The UK has quit the Erasmus student exchange programme after Brexit, complaining it is too “expensive”. The scheme allows UK university students to study abroad in one of 32 participating nations. Some can get a “large contribution” to their tuition fees back in the UK as well as a grant of up to €350 a month.
5. You'll still need travel insurance - despite a health deal
Brits have been warned they must still get full travel insurance for trips to the EU from January 1 - despite the deal. The 1,246-page agreement says Brits can continue to get emergency healthcare while on holiday, like they can under the European Health Insurance Card. People’s current EHICs will continue to be valid until they expire. They will then be replaced with a UK Global Health Insurance Card (GHIC).
But despite this, Brits are being warned they must get comprehensive cover anyway if they are planning a trip to the continent. The Brexit deal doesn’t cover Brits who travel to an EU country “with the purpose of receiving” healthcare - except for a limited number of exemptions.
6. Car plants face a 'tight' future
Britain's car plants have been saved in the short term by the Brexit deal - which stops car exports to the EU being hit with 10% tariffs. It also guarantees car makers can use parts from within both the UK and EU without triggering extra tariffs. However, there will be limits on how many parts a factory can source from outside Europe completely. If a car was assembled in Sunderland but made of 80% Japanese parts, it would count as Japanese and be hit with the 10% tariff.
Under the Brexit deal, these "rules of origin" will be phased in. So the UK's hybrid cars for example will only need a minimum of 40% local content at first to avoid tariffs, but this will rise to 45% from 2024 and 55% from 2027.
7. And there's a four-year paper trail
There will be hefty audit rules for car makers and other businesses who have to prove the origin of their parts. This could add costs and bureaucracy to businesses which, in some cases, are already struggling. The Brexit deal says exporters who've declared the origin of their goods will keep copies of all records "for a minimum of four years".
8. Financial services are in the dark
There are unanswered questions when it comes to the City. The trade agreement is mostly about rules for goods crossing the border - it is less clear when it comes to the trade in services. The deal contains a commitment to work to build closer arrangements, but it hasn't secured the same level of access as pre-Brexit. For many British companies, this will prove a major headache with the true extent of how difficult or not the deal will be for services set to play out in the coming years.
Prof Sarah Hall of the UK in a Changing Europe think thank warned: "UK based financial services firms will either have to comply with the different requirements of individual member states or rely on equivalence decisions. "Neither is a like for like replacement for the EU wide common access facilitated through passporting. "Seeking permissions on a state by state basis would add complexity and hence costs for financial services firms."
9. Trade talks are far from over
There is a long list of things that haven't yet been resolved. Jill Rutter of the UK in a Changing Europe think tank warned: “This is not a final done deal in many respects. There are lots of details still outstanding or to be filled in.” It contains the bare bones for a forum to hold talks between the UK and EU - a "Partnership Council" which "will supervise the operation of the Agreement at a political level”. So while Brexit might soon be over - talks between the UK and EU will not be for many years. They'll just happen behind the scenes.
10. And customs checks will put a 'burden' on firms
While the deal prevents expensive tariffs on UK goods, it doesn't stop all disruption due to Brexit. This is because we're leaving the EU's single market and customs union, so firms need to fill out a host of new declarations. Pages and pages of the Brexit deal are devoted to the minutiae of customs rules between the two territories.
And while there will be measures to make things easier - like co-operation at Dover and Holyhead and the sharing of import/export data - not all of these will come on January 1. Some will only be in "pilot" form.
11. We could still end up slapping each other with tariffs
The ‘level playing field’ was a big sticking point. This means a set of common rules and standards to ensure fair competition. This stops businesses in one country with one set of laws (the UK) gaining an advantage over those in other countries with other laws (the EU). Under these rules, each side will be able to take action “as sovereign equals” if the other side undercuts their industry. This means the EU will be able to slap tariffs on UK exports if the UK is seen to undercut EU rules - and vice versa.
12. The EU will work with the UK on security - but only if the Tories behave on human rights
A big issue in negotiations - and one where both the EU and UK were keen to work together - was on security, and tackling cross border organised crime and terrorism. And the deal is an ambitious one with clear rules on the sharing of fingerprints, DNA and other forensic data. The EU said the deal "builds new operational capabilities, taking account of the fact that the UK, as a non-EU member outside of the Schengen area, will not have the same facilities as before".
However, Brussels has set a major condition on this agreement - the Tories must observe their commitments to the European Convention on Human Rights. The Commission said: "The security cooperation can be suspended in case of violations by the UK of its commitment for continued adherence to the European Convention of Human Rights and its domestic enforcement." It comes after the Conservatives confirmed that they were launching a review of the Human Rights Act which gives the ECHR force in UK law.
13. There’s a special clause to avoid wine price rises
A special provision in the deal has been written to protect the flow of on wine to our shores. It means Spanish or French wine exporters need only "simplified certification, documentation, labelling and packaging requirements" in order to be imported into the UK. This basically just means the price of wine might not rise as much as some other European luxury goods.
14. The European Parliament won’t get a vote before the deal starts
The deal has to be ratified by 27 EU leaders and the UK and European Parliaments. But it’s come so late, the European Parliament won’t get a vote before it takes force. Instead it will enter force as a “matter of special urgency”, provisionally until 28 February 2021, to avoid EU rules ending abruptly at 11pm on New Year’s Eve.
15. And finally… it’s still not as smooth as being in the EU
As if to make all that UK citizens are losing painfully clear, the EU has released a brutal graphic showing the impact Brexit will have on people in the UK. It points out we will need a visa for visits of more than 90 days, and will no longer benefit from "frictionless trade”. By comparison, a string of green ticks show the benefits of EU membership for those living in member states.
So while EU Commission Chief Ursula von der Leyen went to great pains to point out that the deal was "fair", clearly the EU want it to be clear they believe the UK will be worse off after Brexit.
MPs will debate the deal this week with virtually no time to read it in full nor look at the bill that will enable it. Seems par for the course.
6. Car plants face a 'tight' future
Britain's car plants have been saved in the short term by the Brexit deal - which stops car exports to the EU being hit with 10% tariffs. It also guarantees car makers can use parts from within both the UK and EU without triggering extra tariffs. However, there will be limits on how many parts a factory can source from outside Europe completely. If a car was assembled in Sunderland but made of 80% Japanese parts, it would count as Japanese and be hit with the 10% tariff.
Under the Brexit deal, these "rules of origin" will be phased in. So the UK's hybrid cars for example will only need a minimum of 40% local content at first to avoid tariffs, but this will rise to 45% from 2024 and 55% from 2027.
7. And there's a four-year paper trail
There will be hefty audit rules for car makers and other businesses who have to prove the origin of their parts. This could add costs and bureaucracy to businesses which, in some cases, are already struggling. The Brexit deal says exporters who've declared the origin of their goods will keep copies of all records "for a minimum of four years".
8. Financial services are in the dark
There are unanswered questions when it comes to the City. The trade agreement is mostly about rules for goods crossing the border - it is less clear when it comes to the trade in services. The deal contains a commitment to work to build closer arrangements, but it hasn't secured the same level of access as pre-Brexit. For many British companies, this will prove a major headache with the true extent of how difficult or not the deal will be for services set to play out in the coming years.
Prof Sarah Hall of the UK in a Changing Europe think thank warned: "UK based financial services firms will either have to comply with the different requirements of individual member states or rely on equivalence decisions. "Neither is a like for like replacement for the EU wide common access facilitated through passporting. "Seeking permissions on a state by state basis would add complexity and hence costs for financial services firms."
9. Trade talks are far from over
There is a long list of things that haven't yet been resolved. Jill Rutter of the UK in a Changing Europe think tank warned: “This is not a final done deal in many respects. There are lots of details still outstanding or to be filled in.” It contains the bare bones for a forum to hold talks between the UK and EU - a "Partnership Council" which "will supervise the operation of the Agreement at a political level”. So while Brexit might soon be over - talks between the UK and EU will not be for many years. They'll just happen behind the scenes.
10. And customs checks will put a 'burden' on firms
While the deal prevents expensive tariffs on UK goods, it doesn't stop all disruption due to Brexit. This is because we're leaving the EU's single market and customs union, so firms need to fill out a host of new declarations. Pages and pages of the Brexit deal are devoted to the minutiae of customs rules between the two territories.
And while there will be measures to make things easier - like co-operation at Dover and Holyhead and the sharing of import/export data - not all of these will come on January 1. Some will only be in "pilot" form.
11. We could still end up slapping each other with tariffs
The ‘level playing field’ was a big sticking point. This means a set of common rules and standards to ensure fair competition. This stops businesses in one country with one set of laws (the UK) gaining an advantage over those in other countries with other laws (the EU). Under these rules, each side will be able to take action “as sovereign equals” if the other side undercuts their industry. This means the EU will be able to slap tariffs on UK exports if the UK is seen to undercut EU rules - and vice versa.
12. The EU will work with the UK on security - but only if the Tories behave on human rights
A big issue in negotiations - and one where both the EU and UK were keen to work together - was on security, and tackling cross border organised crime and terrorism. And the deal is an ambitious one with clear rules on the sharing of fingerprints, DNA and other forensic data. The EU said the deal "builds new operational capabilities, taking account of the fact that the UK, as a non-EU member outside of the Schengen area, will not have the same facilities as before".
However, Brussels has set a major condition on this agreement - the Tories must observe their commitments to the European Convention on Human Rights. The Commission said: "The security cooperation can be suspended in case of violations by the UK of its commitment for continued adherence to the European Convention of Human Rights and its domestic enforcement." It comes after the Conservatives confirmed that they were launching a review of the Human Rights Act which gives the ECHR force in UK law.
13. There’s a special clause to avoid wine price rises
A special provision in the deal has been written to protect the flow of on wine to our shores. It means Spanish or French wine exporters need only "simplified certification, documentation, labelling and packaging requirements" in order to be imported into the UK. This basically just means the price of wine might not rise as much as some other European luxury goods.
14. The European Parliament won’t get a vote before the deal starts
The deal has to be ratified by 27 EU leaders and the UK and European Parliaments. But it’s come so late, the European Parliament won’t get a vote before it takes force. Instead it will enter force as a “matter of special urgency”, provisionally until 28 February 2021, to avoid EU rules ending abruptly at 11pm on New Year’s Eve.
15. And finally… it’s still not as smooth as being in the EU
As if to make all that UK citizens are losing painfully clear, the EU has released a brutal graphic showing the impact Brexit will have on people in the UK. It points out we will need a visa for visits of more than 90 days, and will no longer benefit from "frictionless trade”. By comparison, a string of green ticks show the benefits of EU membership for those living in member states.
So while EU Commission Chief Ursula von der Leyen went to great pains to point out that the deal was "fair", clearly the EU want it to be clear they believe the UK will be worse off after Brexit.
MPs will debate the deal this week with virtually no time to read it in full nor look at the bill that will enable it. Seems par for the course.
