The European Union and Great Britain literally reached a last-minute trade agreement! The announcement of the Brexit deal on December 24, 2020 came as a long-awaited Christmas present for many and was an important signal for the economy that it will not be additionally burdened in the current crisis situation.
In the area of trade in goods, the agreement provides, among other things:
- Zero tariffs or quotas on traded goods, provided that agreed rules of origin are observed.
- Traders can certify the origin of the goods sold themselves.
- The mutual recognition of AEO (Authorized Economic Operators) programs is intended to ensure fewer customs formalities and a smoother flow of goods.
- Common definition of international standards and the possibility of self-declaration of conformity for low-risk products.
In the area of services, the following changes will be expected for companies:
- The free movement of services will end: UK service providers must adhere to the different rules of the individual member states or relocate to the EU if they want to continue to operate as they do today.
- Provisions have been made to facilitate short-term business trips and the temporary posting of highly qualified staff.
The area of data protection will also be reorganized with Great Britain’s exit from the EU. The BGA expressly welcomes the fact that an interim solution has been found in this regard and that further consultations on bilateral measures are planned.
The subject of the infringement was one of the major issues of conflict in the negotiations, especially against the background of the British Internal Market Act. With Great Britain leaving the European Union, it is no longer subject to the European Court of Justice. Instead, rebalancing and dispute resolution are used. Binding enforcement and dispute resolution mechanisms are designed to ensure that the rights of businesses, consumers and individuals are respected. This is to ensure that companies in the EU and the UK compete on an equal footing and prevent either party from using their regulatory autonomy to grant unfair subsidies or distort competition. At this point in time, however, it remains to be seen how the dispute settlement processes will develop in reality.
Even with the trade agreement, however, the economic relationship with Great Britain has already changed significantly. Since Great Britain is no longer part of the EU internal market and the customs union, the free movement of people, goods, services and capital has also ended. There are a number of changes that the economy will have to adjust to for its future trade with the UK: Products must now comply with both European and UK regulations and standards and are subject to regulatory controls and import controls. Deliveries of goods of British origin are no longer considered EU goods. Supply chains need to reevaluate. British operating licenses and certificates for transport companies are no longer valid in the EU. Special regulations and guarantees for the transmission of data are necessary.
Overall, it can be said that the BGA rates the agreement as a robust and resilient regulation with regard to trade in goods, services and logistics. If the rules of origin are applied, long-term freedom from customs duties can be guaranteed for all product groups. The market access obligations negotiated in the agreement are the most ambitious ever set out in an EU free trade agreement. Still, it is unfortunate that the UK is no longer part of the single market. It is also unfortunate that the agreement was only passed shortly before the end of the transition phase, as companies now have to implement the new rules in a very short time.
The trade agreement between the European Union and Great Britain and the conclusion of this long and difficult discussion is a positive and important signal for the new year 2021!
The BMWi has set up a Brexit hotline that is available to entrepreneurs if they have any questions about the Brexit decision. The hotline will also be manned over the Christmas days and the turn of the year.
Tel.: 030 – 340 6065 61
Email: brexit @ buergerservice.bund.de
There are also two checklists for the end of the transition phase and Brexit from January 1, 20201: