Last-minute execution: the way is clear for the cooperation agreement between the United Kingdom and the European Union. The British head of state Queen Elizabeth II approved the ratification law on Thursday night and thus put it into force. The agreement prevented a hard economic break before the United Kingdom finally left the EU single market and customs union on the night of January 1, 2021. The agreement not only affects the movement of goods, but also areas such as state subsidies, energy and sustainability, air and road traffic and social security. The European Parliament will examine it in the new year. Once approved, the agreement can be ratified and applied permanently.
The almost 1.250-page trade and cooperation agreement establishes a comprehensive economic partnership based on a free trade agreement. And the good news first: There will be no customs duties, quotas or quantitative restrictions on goods imported into the United Kingdom in the future. Despite the agreement, however, cross-border trade is burdened by more bureaucracy and border controls. UK companies must declare their goods to customs before crossing into the European Union and vice versa. The agreement also does not apply to services. With the entry into force of the new British Immigration Act, many cross-border services can no longer be provided. For the German industry association SPECTARIS, despite the positive conclusion of the negotiations, the handling of many commercial transactions across the English Channel will change significantly from January 1, 2021. The German economy did not have enough time to prepare.
SPECTARIS Managing Director Jörg Mayer welcomes the agreement, but also sees playful potential: "In order to cushion trade barriers for companies from high-tech sectors that are heavily dependent on exports, such as optics, photonics, analysis and medical technology, customs procedures with as few bureaucracies as possible are needed on both sides of the border. Especially for medium-sized companies, new processes with high resource requirements are often an obstacle to market entry. The agreed free trade agreement supports mutual, harmonized market access. However, the fact that no agreement could be reached on a comprehensive agreement on future trade relations means that the regulatory costs will carry even more weight in the future. This in turn will lead to planning uncertainty, less competition and rising prices for the end consumer.”
In addition, further import controls are already causing delays at the border. “These complicate the sales management of the companies. Every standard deviation in deliveries increases the pressure on companies to plan for costly stockpiling,” emphasizes Mayer. Given the limited capacity of the border infrastructure, this part of the preparations is proving to be particularly difficult to calculate.
One thing is certain: smooth movement of goods without traffic jams at the borders between the United Kingdom and the European Union should be guaranteed even after Brexit. SPECTARIS therefore welcomes a risk-based approach to customs inspections, simplified and preferably electronic customs clearance and the option of pre-declaring all goods, the so-called “pre-arrival processing”.
Source: Press release SPECTARIS from January 01.01.2021st, XNUMX