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On January 24th at 14:44, the document containing the main premises after Brexit of the trade and cooperation agreement reached the media. This agreement sets the guidelines for the relationship between the United Kingdom and the European Union from January 1st. It is therefore of enormous relevance at an economic, geopolitical and social level.
First and foremost, we must be clear that the break-up of a single economic and social area is never a cause for rejoicing and that, without doubt, the relationship between the United Kingdom and the European Union will be much less fluid from now on than it has been over the last 47 years. That is why the agreement would not be optimal in any case, but rather a minimum pact in which some basic premises would be established for the continuation of a historical relationship and, above all, would open the possibility of continuing with the negotiations on the UK-EU relationship in a post-Brexit environment and with less pressure from the media. The only thing we have is the signed agreement, which is why we must concentrate our analysis on what has been signed and stipulated and not so much on digressions about the future of the relationship. Let’s get to it.
Firstly, the Brexit agreement focuses mainly on establishing the terms of the UK-EU relationship regarding the movement of goods, capital and people, international agreements on security and defense, transnational investment, governance, etc. In my opinion, such an agreement, concluded in extremis, is positive for both parties, since it allows the relationship to be kept active, gives rise to future negotiations and improvements in it and, above all, avoids an even more chaotic Brexit.
The dynamic adaptation framework to which the agreement gives rise is, in my opinion, one of the key points of this agreement, since many more technical or conflictive points have not been fully addressed in this agreement or have simply been reached with a minimum understanding, which makes the dynamic adaptation framework very important for adopting future solutions or expanding what has been agreed between the two powers in areas such as finance, health, data protection, etc. If we work on improving the relationship and reducing the friction between both blocs, in a few years we could see the United Kingdom maintaining a relationship with the EU similar to that of some countries like Switzerland. In no case will it be a “Soft Brexit”, but it will be a lesser evil when a perfect solution was not to be expected after the time wasted by both blocs regarding the negotiation.
In this regard, it should be noted that the agreement, although minimal, is very careful in trying to keep trade relations open as much as possible, not only in goods and services, but also at the investment level, in terms of competition, fiscal transparency or renewable and nuclear energy. The exit document establishes that zero tariffs and quotas will be applied to all UK-EU goods that comply with the established rules of origin. In this sense, a level playing field should be guaranteed through the maintenance of a very similar level of environmental protection (through, for example, carbon pricing), and in terms of social and labor rights, as well as in terms of public aid to companies. None of the blocks could deviate too much from these previously established conditions, although, should this occur, the document itself establishes a binding mechanism for the resolution of conflicts between both parties, leading to the application of corrective measures previously approved by this mechanism.
A post-Brexit conflict resolution mechanism
This mechanism is called the Joint Partnership Council and will ensure the correct interpretation and implementation of the agreement by both parties, solving the problems and frictions that arise. This is very relevant, since it will guarantee that EU and UK companies compete in equal terms, avoiding distortions of competition through government subsidies or due to abuses of regulatory independence by either of the two parties. As mentioned above, in the event that some of the parties fail to comply with their conditions, the Joint Partnership Council can approve the application of cross-sector retaliation as a corrective measure.
The issue of fishing was highly disputed in the negotiations of the agreement, and it was finally signed that the Community fleets will be able to continue fishing in UK waters, albeit with a 25% cut in the quota available now. This agreement on fishing will last for five and a half years, after which the fishing quotas will have to be negotiated and approved year after year.
As far as transportation is concerned, the agreement aims to maintain the maximum possible connectivity of air, road, rail and sea transport, although in terms of the transportation of goods, Europeans’ access to the British market and the British to the European market will be lower under these conditions in contrast to those stipulated by the single market.
With regard to what has been agreed on energy matters, the agreement guarantees open and fair competition, including energy security (referring to nuclear energy) and renewable energy production.
One of the points I find most interesting in the agreement is the agreed coordination of social security, which would guarantee a number of basic rights of EU and UK citizens in both territories, affecting especially those who study in the UK, workers in both territories or those who plan to move to the UK from the EU or vice versa. The agreement also establishes the continuation of the participation of both powers in various EU programs for 2021-2027, such as Horizon Europe or the Copernicus space program. Unfortunately, the Erasmus program is left out of this agreement, so from 2021 student programs between the two blocs will not be funded, organized or promoted by European institutions for British citizens, or Europeans vice versa.
It should be noted that, although the Trade and Cooperation Agreement is not just a simple free trade agreement, as it provides a very broad and extensible basis for cooperation, it still leaves many aspects uncovered, which will be the areas where Brexit will be most noticeable. I refer in particular to the absence of a common framework in foreign policy, defense (beyond NATO) or certain security aspects (although cooperation of justice and police will continue). Also, in the area of security, health security is included, so cooperation would continue on issues such as common programs and/or strategies against the spread of Covid-19.
In conclusion, I believe we are facing a good agreement if we take into account the remaining possibilities and time. We must bear in mind that this would never have resulted in an optimal agreement since the Tories were always opposed to a “Soft Brexit,” so an agreement, even a minimal one, that guarantees the continuity of a fluid trade (although it will never be what it was) between both blocs, open to future negotiations and improvements, is a success for both parties, especially the European one. Now the time has come to adapt the structures of the EU, rebuild alliances and wage the joint battle in a new and continually changing scenario, both economically and geopolitically.
Álvaro Martín es licenciado de la Universidad de Harvard, con una maestría en administración de empresas de esta misma universidad. Comentarista puertorriqueño que ha trabajado para ESPN Deportes y NBA League Pass // Álvaro Martín is a graduate of Harvard University, with a master's degree in business administration from the same university. He is a Puerto Rican commentator who has worked for ESPN Deportes and NBA League Pass.