Brexit

The United Kingdom left the European Union on 31 December 2020 and UK-EU relations are now governed by a Trade Co-operation Agreement (TCA.)  The TCA covers a wide range of policy areas which includes trade in goods and in services, digital trade, intellectual property, public procurement, aviation and road transport, energy, fisheries, social security coordination, law enforcement and judicial cooperation in criminal matters, thematic cooperation and participation in Union programmes.” According to the European Commission “it is underpinned by provisions ensuring a level playing field and respect for fundamental rights” so that the TCA  “goes beyond traditional free trade agreements.”

The implementation of the TCA has created many problems particularly for UK exporters in the food industry and for its implementation in Northern Ireland.   The problems in Northern Ireland led to the revision of the Agreement and its replacement by the Windsor Framework in 2023.

It is difficult to predict the long-term effects of Brexit due to other factors such as the long terms effects of COVID and the war in Ukraine, but many reports have painted a picture that Brexit has had a detrimental effect on UK trade with the EU and there are many accounts of UK exporters facing extreme difficulties in exporting to the EU.

The UK Government’s independent Office for Budget Responsibility (OBR) has produced some interesting data.  Last updated in April 2023, the OBR has stated that the TCA will reduce long term productivity in the UK by 4% compared to staying in the EU.  The OBR pointed out that this has been caused by an increase in non-tariff barriers between the UK and EU. While the European Commission has stressed that the TCA goes way beyond normal free trade agreements, the OBR argues that in terms of trade only,  it does function as a normal free trade agreement.

The OBR has estimated that imports and exports will be 15% lower than if the UK remained in the EU.

There are parts of the TCA where discussions are ongoing between the EU and the UK.   One of the most notable areas is the UK entry into the Horizon Europe Research and Development Programme.

 

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