Search

Tough Post Brexit Negotiations Ahead

The post-Brexit UK-EU negotiations that are now underway in Brussels, are going to be very difficult as both sides publish their mandates defining the type of deal that they are looking forward to.


There is a lot of common ground between both parties, given that the UK was part of the bloc for more than 40 years and helped shape many of the governing rules.


However, this does not mask the widening gulf on some important issues as the UK signals that it wants to diverge from alignment with EU regulations, as it seeks to agree new trade deals with other nations.


The issue of divergence from EU rules, which the UK is currently sticking to during the transition period, is contentious.


The EU would like the UK to maintain similar product standards to the EU. The bloc is worried that if the UK dropped standards then, some of the lower quality products could find their way into the EU from the UK.


And the bloc is also keen to stress that tariff-free access to the single market should not be seen as a license for UK producers to undercut their rivals in the EU.


The EU, therefore, wants a level playing field with strict open and fair competition rules, which the UK previously agreed to, but now appears to be reneging on that agreement.


The services sector makes up 80.2 per cent of the UK's economy, however, it is still unclear how this dominant part of the economy will fit into any future trade agreement.


There is also the financial and banking sector which is about 26 per cent of the UK economy but will lose passporting rights that allow the sector unfettered access to the single market.


At this stage, the services sector doesn't not seem to be part of the Canada-style deal that the UK is pushing for. Maybe any trade deal designed around the Canada model will be a bespoke one with a bolt-on addressing services.


It is also unclear how the trade deal will be policed and regulated. The EU wants the European Court of Justice (ECJ) to be the final arbiter in disputes, but that is a red line for the UK.

To stay on top of all ongoing updates around this and tying it in with the GBP technical set up ideas, check out our membership.

Copyright © 2020 FreakNetwork All Rights Reserved