Brexit clock still ticking?


The European Union (EU) has been under a glaring spotlight for a while now; the whole of Europe per say over the past year ever since the United Kingdom announced its most precedent withdrawal from the bloc leading through the referendum held back in 2016. With shuffle of governments in Britain to the deadlock in the house, the British parliament finally settled on the much-championed idea of exiting the bloc.The British Prime minister, Mr. Boris Johnson, led the way to enter a transitionary period to finally stand independent from the bloc. However, the ensuing impediments were far less predictable than anticipated by either parties.

Arguably the most well integrated economic bloc, EU has been operational within the core of Europe dated back earliest to the 1950’s. The renowned union today shaped in the 1990’s proving to be a haven of economic flourish and regional peace and tranquillity. The bloc encompasses 28 member-nations primarily located in Europe. Despite of the challenges faced by the bloc over decades like the Global Financial Crisis of 2007, the member states stood steadfast and waded through every obstacle whether in terms of economic support, policy structure, terrorism or refugee crisis. However, with the exit of the UK from the bloc, the 27 remaining member states are yet to finalise the way forward with the Great Britain and the rest of the world, something that was highly unorthodox a year prior to the talks.

The 11-month transitionary period signed on 31st January 2020 ends with the year itself; mere days leaving the region dreading last-minute negotiations to strike finality to avoid a baffling open to the new year since a high possibly already loomed over a No-Deal scenario. A few points stick out as matters of dispute which stretched the negotiations this far along. Level playing field is one major point standing out and possibly the most known clause in the agreement. With Britain’s exit from the Union, it was and indeed is highly expected that UK would derive disparity in the business cycle which could garner a highly competitive advantage to the businesses anchored in Britain since they would no longer be expected to abide by the rules and regulations imposed under the Charter of European Union. Therefore, while EU continues to stress upon a closer focus of UK-denominated firms to adhere to the policies dictated by EU regarding state sponsored subsidies, workers’ rights and environmental regulation, UK tends to steer clear of such a notion in the agreement, presumably holding a polar position since it challenges the stance entirely claiming ‘Brexit’ literally means freeing UK from EU’s rules and regulations and thus slashing corporate taxes is only justified.

Furthermore, the agreement signed continued to pull autonomy to the European Union to impose penalties in guise of a power statement over UK post their exit from the Bloc. Albeit their agreed position of not imposing the penalties unilaterally, EU continues to fear the means of Britain to exercise unfair policies in key areas. Sectors related to fishing, cross-border security, and surveillance are something regarded only to the member states under the laws of EU. Therefore, the agreement brings about the power to the Union to impose tariffs and taxes in the core areas, nexus to both the parties, to be exercised only as a retaliation lest UK incorporates any means beyond the span of the Deal agreed upon.

The UK-EU Brexit Trade Agreement was published full-text on the day of Christmas highlighting key areas of negotiations and settlements. The Brexit declaration vaguely refers to the state-offered aid issues, mutually agreeing the sectors allowed to be subsidised while still bearing fair competition in mind. This clause aligns with the looming fear of the EU officials regarding UK’s inadvertent efforts to offer economic flexibility to its businesses as it divorces from the union. However, the intricacies involving subsidy controls and tax schedules are still broader to interpretation which could lead disputes in the foreseeable future.

Moreover, the financial sector itself is narrowly touched upon, ironic since UK enjoys a significant edge over the region in financial services and the new Europe could suffer a deadlock under the new agreement. The agreement offers a memorandum of understanding in the financial services, extending the cross-border trade and deals under mutual rules and policies till March 2021. While financial stability is the key agenda for the entire region under the pandemic, the brief coverage of the sector under the agreement garners complexity in adjustments.

Furthermore, the labour rights and rules were probably the most nail-biting points in the negotiations. The Mutual Recognition of Professional Qualification (MRPQ) deal under the Brexit declaration relays recognition of professional qualifications across border; providing relief to the professions across border. Despite of the uncertain implementation plans and market expectations and supposed biases post Brexit, the deal brings about a hint for the region to adjust to the changes in the norms and work relations. However, the transition is far more simpler on paper than in reality since the shift would differ from member-state to member-state and profession to profession.

The agreement, however, is deeming far more futile than it did back in 2016. Whilst UK planned the split 4 years ago, the proponents of the exit have diminished since then. US was probably the major supporter of the clause, Mr. Trump not only championing the split but promising trade deals to Mr. Johnson. However, the president elect, Mr. Joe Biden, effusively cultivated the cause of alliance and collaboration, opposing the exit from the bloc and maintaining the motto of ‘America First’. Its apparent that any trade deal with the United States is out of question till America regains economic control which seems more far fledged than ever before. The Britain, despite surpassing the trade barriers across English channels, has served stringent alliances in the region whilst has tarnished its chances of alliance with China under the antagonistic position UK adopted whilst chasing the US agenda in the 5G network. Under the uncertain times and no concrete alliances, UK finds itself in more despair than any country in the region while EU stands on the verge of striking a landmark financial deal with China which could nudge EU into a superior phase of operational control of the East.

Now with the much quarrelled and bickered deadlock laced with uncertainty of months, a deal is struck. The clock apparently stands no longer ticking, so were the words of the EU chief negotiator Michael Barnier, deeming the Christmas Eve as ‘the day of relief’. Yet with the fishing waters still sparing under uncertainty, the Northern Ireland borders still rendered undecided for and the newfound restrictions over travel to and fro UK in the alarming situation of a new strain of coronavirus, the success of the Deal is yet to unfold. Although the deal is quoted as ‘A Balanced Deal’ by the European Commission President, Ursula von Der Leyen, exactly how the deal is executed and how far along it lasts is just as uncertain as every event were in the past year, completely under the shadows.

Syed Zain Abbas Rizvi
Syed Zain Abbas Rizvi
The author is a political and economic analyst. He focuses on geopolitical policymaking and international affairs. Syed has written extensively on fintech economy, foreign policy, and economic decision making of the Indo-Pacific and Asian region.


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