What Is Brexit Deal and What Does It Mean?

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The main difference is on the crucial issue of the Irish border and whether the UK will leave the customs union entirely after the transition period. Brexit is short for “British exit” and describes the UK’s scheduled departure from the European Union. The European Union is a political arrangement between 28 European countries which share common laws and regulations in exchange for privileged access to each others’ markets. The UK voted to leave the EU in a 2016 referendum by a margin of 52% to 48%. The transition period is due to run until at least the end of 2020.

  1. And the two sides will have to continue to talk about how to implement it most effectively.
  2. Leaving the customs union means the UK will be able to strike trade deals with other countries in the future.
  3. The trade agreement is primarily about the rules for goods crossing borders.
  4. Officials in the UK are hopeful that technological solutions can be created which remove the need for border checks even if it was not in the EU customs union.

These other non-tariff barriers are estimated to increase costs for British businesses by approximately £17 billion (about $23 billion) and for EU businesses by about £14 billion each year. On Dec. 24, 2020, leaders of the European Union and the United Kingdom announced that they had agreed on a trade deal called the Trade and Cooperation Agreement (TCA). The deal came more than four years after the 2016 Brexit referendum and eleven months after the U.K.’s legal departure from the EU, but only one week before the Dec. 31, 2020 deadline for reaching an accord.

All I hear is ‘Northern Ireland’. How does this deal impact the rest of the UK? – Simon, Waddington

And the two sides will have to continue to talk about how to implement it most effectively. The government also says British citizens will not need an International Driver’s Permit to drive in the EU (unless they still have a paper licence or a licence from the Isle of Man, Guernsey, Jersey or Gibraltar). But they will need to carry a green card to prove they have the right vehicle insurance. The two sides agreed to co-operate on international mobile roaming, but there is nothing in the agreement that would stop UK travellers being charged for using their phone in the EU and vice versa. Banks, investment firms, and insurers have established companies in major EU cities and transferred employees and capital to the continent and the Republic of Ireland, which continues to be an EU member.

Does this deal allow the UK to trade independently with the rest of the world? – Kelly Osadolor, Swindon

In return for this arrangement, the UK has committed to paying £39 billion to the EU budget, the same amount as if it had retained membership. We know there will be more bureaucracy and delays at borders in the future, for companies trading between the UK and the EU. But will the two sides agree any measures to make things a little easier?

Trade would have suddenly been subject to the rules and tariffs of the World Trade Organization (WTO). This would have significantly increased the cost of agricultural products, cars, and other manufactured goods. The parties did not reach agreement on recognizing each other’s standards for products.

If there were to be no agreement during this two year period, some form of hard border could re-emerge in Ireland, but it’s unlikely that would be allowed to happen. If the Northern Ireland Assembly votes against the new arrangements, they would stop applying two years later, during which time the “joint committee” would make recommendations to the UK and EU on what to do about this. Because Northern Ireland will be set apart from the rest of the UK when it comes to customs and other EU rules, the deal gives its Assembly a vote on these new arrangements.

That is a measure in the Withdrawal Agreement designed to ensure no new border checks arise between Ireland and Northern Ireland when the latter leaves the EU. An agreement has been reached on extradition, and the UK’s role in Europol, the cross-border security agency, allows it to sit in on meetings but not have a direct say in decisions. Both of these are positive, and on a par with the best other countries have achieved. That’s why an EU decision to recognise formally that UK data rules are roughly the same as its own is so important – and we’re still waiting for that. Michelle P. Scott is a New York attorney with extensive experience in tax, corporate, financial, and nonprofit law, and public policy. As General Counsel, private practitioner, and Congressional counsel, she has advised financial institutions, businesses, charities, individuals, and public officials, and written and lectured extensively.

Citizens’ rights

However, the U.K.’s standards must protect fair competition. There is an agreement to continue talking about financial services regulation in the future, but some companies may have to apply to specific EU countries to be allowed to operate there. The guaranteed access that UK companies had to the EU single market is over.

Brexit: What are the key points of the deal?

The political declaration is a much shorter document which sets out aspirations for the future UK-EU relationship in areas like trade and security. However, there is a growing belief that Brexit will be delayed by at least a few months. That is because the Prime Minister has been unable to secure majority support for her Brexit deal in the UK parliament, meaning it can’t pass into law. Disagreements over data will be dealt with by a new committee, not by the European Court of Justice – again, a red line for the UK. But taken together, the speed with which the UK gets important data, and the influence it has on decisions, has been reduced. Although British regulators have indicated that they will allow some EU organizations to extend their U.K.

That is different from the EU system which assesses the likely impact of subsidies before they are handed out. The leaders of Northern Ireland, which had voted against leaving the EU, were pleased to avoid a no-deal Brexit. The deal preserves the open border between Northern Ireland and the Republic of Ireland and effectively creates a customs “border” between Northern Ireland https://www.forexbox.info/what-is-carry-trade-in-forex/ and the U.K. On Twitter, Taoiseach Micheál Martin of the Irish Republic expressed gratitude to the EU negotiators for reaching an accord and preserving the open border with Northern Ireland, but noted regret at the U.K. However, the TCA at least avoids the worst-case scenario, a no-deal Brexit. If no deal had been reached by midnight on Dec. 31, 2020, then all EU-U.K.

There have also been changes to the political declaration which sets out plans for the long-term relationship between the UK and the EU. It says the future relationship will be based on a Free Trade Agreement, but there’s https://www.day-trading.info/make-money-in-the-stock-market-by-identifying-the/ no guarantee one can be agreed by the end of 2020. The references to a “level playing field” were removed from the legally-binding withdrawal agreement and put in the political declaration, which is not binding.

The deal states that at the end of the transition period is in December 2020, while the rest of the UK will leave all of the EU’s institutions, Northern Ireland will have to keep to some of the EU’s rules. In some cases it will have to charge EU taxes on certain types of goods. And even if they were voted down – which is considered unlikely – there would then be a two-year cooling off period for other arrangements to be made to try to avoid a hard border. The House of Commons rejected Theresa May’s Brexit deal by 432 votes to 202 on January 15 — the biggest government defeat in UK history. Many MPs who opposed the deal were opposed specifically to the Irish backstop.

Prime Minister Boris Johnson has acknowledged the deal’s omissions with respect to financial services. You are hearing about Northern Ireland because the removal of the old backstop is probably the biggest single change. Other parts of the withdrawal agreement, such as the 4 reasons you should be trading with range bars transition period, citizens’ rights, and the money the UK has to pay, will stay the same. The UK will still follow EU rules and regulations until the end of 2020. For individuals, the loss of automatic professional access and free movement throughout the EU and U.K.

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