British markets could suffer from imposed tariffs and regulations from trading with the European Union
Brexit has been a big topic in the media recently, especially for the past week. The United Kingdom officially left the European Union (EU) on Jan. 31. The process of the UK leaving the EU has been going on for quite some time. The country was supposed to leave in March of 2019, but clearly, that endeavor failed. Now that it has finally taken action to depart from the EU, the UK is in a transition period, and there are a lot of policies to be negotiated in order to make this departure as satisfactory as possible.
During this transition period, the UK will continue to follow EU policy, allowing them to have a smooth progression to British sovereignty from the rest of Europe. Originally, the UK only had until Dec. 31. The EU, however, has allowed the UK to extend the deadline, which ends on June. 30, if needed. Boris Johnson has stated that the transition period will not be extended; however, the European Commission has warned that the timetable of this procedure will be extremely difficult.
The transition period and other aspects of the UK’s departure from the EU were agreed upon in a separate deal called the withdrawal agreement, which was negotiated by Theresa May. After Johnson replaced May in June of 2019, he removed a key controversial section of it: The Backstop. This segment of the deal was designed to ensure the exclusion of border ports between Northern Ireland and The Republic of Ireland after Brexit was completed.
Johnson changed it in order to create a border between Northern Ireland and Great Britain. This means that goods entering Northern Ireland from Great Britain will be subject to EU tariffs and checks. The majority of the withdrawal agreement has remained unchanged. Two main clauses from the original agreement that Johnson wanted to keep are the rights of EU citizens in the UK and British citizens in the EU and the amount of money the UK will pay the EU, which is estimated to be around £30 billion.
The EU allows for free trade among European nations who are members of their union. This gives the countries who are members the advantage of avoiding customs checks and tariffs on their goods. Without a new deal between the two states, British goods would be imposed with tariffs when crossing into EU jurisdiction; nonetheless, trade is not the only issue a Brexit with no deal would have.
Diplomats must also discuss how law enforcement, aviation standards, fishing waters, electricity and gas and licensing, data sharing and regulations of medicines would be affected under Brexit.
One current example of how Brexit could negatively affect the British economy can be seen in the Scottish fish industry. The Chief executive of the Scottish Salmon Producers Organization, Julie Hesketh-Laird, said firms were being informed to prepare themselves for the economic difficulties Brexit will cause between the UK and the EU. The industry is also warning that added regulations from the EU could cost the firms up to £9 million and could cause delays in the shipment of fresh fish.
There are also speculations that the long-term relationship between the EU and the UK could experience an increase in tariffs from 2 percent to 13 percent for smoked salmon. These economic burdens could put Scottish salmon exports at a disadvantage in the general European fish market, allowing Norwegian, Irish and Canadian exports to attain a bigger share of the overall market.
In addition, the firms are apprehensive about the appearing battle over fish stocks in UK waters. Salmon farming itself does not play a part in the Common Fisheries Policy; nonetheless, British exports could be penalized by the EU for catching fish outside of UK waters. This would be detrimental for business since in 2018, 39 thousand tons of Scottish salmon were sold to the EU alone with global exports topping at £500 million and the EU accounting for half of all sales.
This is just an example of one industry that could suffer from a bad or no Brexit deal. As the transition deadline slowly approaches, British politicians need to minimize the number of changes Brexit could bring to the UK. There are many industries at risk, and many foreign policies need to be made from Brexit.
With many potential harms on the horizon, the British Parliament has much to discuss in order to make the right decisions for its citizens.
~Cesar Gonzales-Engelhard, Staff Writer~