The whole world has kept a keen eye over Brexit. The new trade deal between UK and European Union has gathered mixed reactions from economists and many argue it going against the welfare of UK Citizens.
UK has officially left European union (EU) on 31st December 2020, but we’ll have to wait to see how much Brexit will serve its purpose. Speculations are being made everyday worldwide and people have been guessing its outcomes for a while now. It all started with a people’s referendum in 2016, when UK citizens voted to part with European Union. Since then, UK has seen three Prime Ministers with 2 of them stepping down on different occasions due to contrary reasons. The main reason for majority voting in favor of Brexit is a matter of sovereignty with a projection that decisions of UK should be made by UK only. Whether be it trade-commerce, education or constitutional affairs, people wanted it to be handled within the borders only. And this led to a vote of 51.8% in support of the exit.
In the subsequent years, Brexit gained a lot of dissent particularly from the UK as it would affect its citizens on various aspects. Be it the restrictions over travel to EU countries or securing employment in those countries. Businesses speculate to be hard hit by the Brexit as it would cause a constraint in their existing free travel policy. With everyone keeping an eye on the exit deal, UK Prime Minister Boris Johnson delivered some good news by coming to a crucial agreement and trade deal with EU just before the year end. This is considered as a ray of hope as there were no signs of any deal whatsoever. This deal which is flagged by Boris Johnson as a great achievement, contains agreements on various factors and different sectors. There were several strangled issues between UK and EU which got temporarily resolved under this deal.
Trade- Import/Export of goods and services:
The deal says there would be no tax or tariff on the border, so it would be a free movement of goods between UK and EU countries. But various checks and paperwork shall be mandatory for the trade to happen. Businesses consider this as a big delay in the import and export of goods leading to a decrease in productivity. Talking about services, businesses offering accounting, banking and architecture services would no longer be officially registered within EU. This poses many restrictions in the ongoing practices and received great disapproval by UK corporations. It is worth noting that UK mostly export services and import goods, so restrictions on services and permission of goods flow is of very less help to UK.
Fishing in British waters:
UK has allowed EU a tax-free fishing in its waters for an upcoming period of 5 and a half years. British fisherman consider this a threat to their business and economy. Adding to it, the two parties have also decided to come up with some permanent and less restricted deal over this matter.
Travel and Jurisdiction:
The deal imposes travel restrictions over UK citizens in EU countries. UK nationals will need a visa for stays of longer than 90 days in the EU in a 180-day period. Earlier there were no such restrictions.
Under the new deal, United Kingdom will no longer be a part of European Court of Justice (ECJ), the highest court in EU. UK nationals stand in support of this by considering it as a repossessment of power in UK’s hand.
Apart from these, there are certain other limitations and restrictions. For instance-UK will no longer have access to key security databases. It would also not be a part of educational programmes of EU, reducing the earlier exposure UK students were getting.
On economic terms, many financial reports indicate a decrease of 2-2.5% in UK’s GDP. Restrictions on travel would lead to decrease in immigration and loss of jobs for UK nationals residing in various EU countries. This will give a surge to employment demand within UK leading to a reduction in income. It would also bring about a disruption in business deals and their economy. Heads of the company have been more busy in understanding Brexit rather than working on businesses.
All the above mentioned factors invite serious questions on Brexit as well as the trade deal. This is the time when UK will have to show genuine concern and maturity, if not done so, the referendum will hamper UK’s growth in the near future and pull back its economy by a few years.