There is a shortage of food in the market, while the gas stations run out of fuel and the foreign workers leave the country. Is this the picture that prevails in the UK, a year after it left the EU? What is certain is that disruptions in supply chains, combined with a shortage of drivers and other EU workers, are prolonging gloomy images with empty supermarket shelves and endless autumn queues at gas stations. The new legal framework for London’s trade relations with the “Europe of 27”, which entered into force last January, provides for four-page formalities for bilateral trade plus the necessary health certificates for meat and other agricultural products. According to the European Statistical Office Eurostat, British exports to the EU decreased by about 10% in the first ten months of 2021. In fact, in agricultural products the reduction reached 25%.
Is Brexit to blame or a pandemic?
All this was happening while London was struggling to fight the new – at that time – “Delta mutation” of the coronavirus, which eventually brought a third in a row lockdown. The British government insists that the economic consequences of Brexit can not be considered in isolation without considering the cost of the pandemic, but many economists take a different view. “We can say that significant losses in trade with mainland Europe are not offset by Britain’s trade with the rest of the world,” Ian Beg, a researcher at the London School of Economics (LSE), told DW. Brexit was supposed to put an end to the European bureaucracy, but ultimately provoked new formalities, increasing the overall cost of exports.
Small and medium-sized enterprises in particular have seen their exports disappear. “The post-Brexit trade deal was the worst deal a government has ever negotiated,” Simon Sparel, co-founder of the Chesire Cheese Company, told The Guardian. Some companies stopped accepting orders from mainland Europe. “The endless bureaucracy only brings small businesses to their knees rather than financial giants like Nissan,” warns LSE researcher Ian Beg. Brexit.
More bureaucracy since January
The bureaucracy has become even more labyrinthine since January, as the British government has announced a new legal framework governing imports from the EU. cross the Channel. The submission of the relevant bill has been postponed three times, in order to avoid new charges for small and medium enterprises. The situation is aggravated by the rather sudden resignation of the British negotiator David Frost a few days ago. Some analysts say Frost’s departure is stepping up pressure on Prime Minister Boris Johnson to adopt a more conciliatory approach to Brussels to prevent a generalized trade war.
For the economist Ian Beg, a major problem is that the EU-UK agreement on future trade relations between the two sides leaves a lot of unfinished business, which urgently needs to be settled. These issues mainly concern the issue of Northern Ireland, fisheries policy and financial services. For example, the “City” of London, a global financial center, has been “almost ignored” in the latest agreement between Brussels and the British government, Beg points out. City is seeking a parity with similar financial centers within the EU with mutual recognition of legal arrangements, but this does not seem very likely at the moment. “The real consequences of Brexit for banks and portfolio companies will be seen in 2022,” Jake Green, an associate of the London-based law firm Ashurst, told Financial News Weekly.
They also divide fisheries into Northern Ireland
Disputes between Britain and France over fisheries rights are likely to continue. As for the Northern Ireland Protocol – and the politically thorny question of whether a new customs border between Northern Ireland and the rest of the United Kingdom can be avoided – everything shows that it will be difficult to resolve if the London government does not accept European jurisdiction. Court of Justice in commercial disputes arising from the interpretation of the Protocol. “The ideal solution for Northern Ireland would be to make the borders almost invisible,” said Ian Beg. “There is mobility in this direction, but logic says it can not, somewhere there must be borders …”
Following Frost’s resignation, the burden of negotiating with the EU falls on Foreign Minister Liz Trass. It will have a difficult task, as on the one hand it must keep the hard-line Eurosceptics within the Conservative Party, while on the other hand it must avoid further escalation in the already strained relations with Brussels. Seeking an explanation for the current stalemate, Ian Begg argued that “the British had misunderstood Germany’s position on Brexit” and believed that Berlin “would intervene in the stalemate between London and Brussels” in order to save a market that the German car industry. However, the LSE researcher emphasizes, “Angela Merkel never came to the rescue of the British and I doubt if Olaf Solz will do something different …”
DW – Nick Martin / Giannis Papadimitriou
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