Britain broke from the European Union’s regulatory orbit on Jan. 1, casting off nearly half a century inside the bloc. The split, known as Brexit, has now been finalized, setting in motion what analysts say will be the biggest overnight change in modern commercial relations. 

Why is leaving such a big deal? 

Europe is Britain’s most important export market and its biggest source of foreign investment, and E.U. membership has helped London cement its position as a global financial center.  Major businesses threatened to leave Britain because of Brexit. 

Had the split been finalized without a deal governing future commercial relations, businesses feared enormous logjams at the borders and deep uncertainty about rules of trade across the English Channel. 

What about the trade agreement? 

A no-deal separation looked likely to create gridlock at British ports and strand trucks on either side of the border. Had the two sides failed to reach a deal before the Dec. 31 deadline, tariffs would have been imposed, raising the price of cars considerably and making it much more difficult for British farmers to sell meat, for example, elsewhere in Europe. 

The new trade agreement meant that Britain avoided onerous tariffs or quotas on goods. But problems at the border could still emerge, with checks increasing, traders having to complete new customs declarations, and commercial relations facing more restrictions.

Pro-Brexit lawmakers got many of their wishes.

The new trade deal ends the free movement of people between Britain and the rest of the continent. It also ends Britain’s involvement in the Erasmus exchange program. Britain has now left both the single market and the customs union and can pursue separate trade deals with other countries. 

But the E.U. won assurances, too. 

In return for allowing British companies to avoid tariffs, the E.U. wanted to ensure that those companies would not gain unfair advantages over E.U. rivals. The bloc’s leaders worried that Britain would give its own companies a leg up through additional state aid or by lowering environmental or labor standards. the two sides worked to devise a mechanism by which either could raise a complaint if it had evidence that one had changed regulations in a way that put the other’s businesses at a disadvantage.

What about Northern Ireland? 

Under a deal struck late in 2019, Northern Ireland was given a special trade status and will continue to follow many European rules, so trucks can continue to cross the Irish border freely. The new trade deal struck on Dec. 24 prevents the addition of more bureaucracy for traders. 

The British economy faces enormous hurdles.  

The sale of services (accounting for 80% of British economic activity) now hangs on patchwork decisions by European regulators about whether Britain’s new financial regulations are close enough to their own to be trusted. 

The Office for Budget Responsibility, an independent official body that assesses the British government’s economic plans, estimated that economic output in the country could be 4% lower cumulatively over the next 15 years than it would have been inside the E.U.

What’s next?

For bankers, traders, truckers, architects, and millions of migrants, the Dec. 24 trade agreement was only the beginning, Day 1 of a high-stakes and unpredictable experiment in how to restitch a tight web of commercial relations across Europe.

Britain is short of customs agents to deal with the tens of millions of customs declarations that are now needed. The deal also did little to assuage fears about how the country’s new immigration rules could complicate the lives of E.U. citizens living in Britain. People from other European countries have been allowed to apply for “settled status” in Britain, the right to stay indefinitely, and more than two million of them have been granted that status.

What about us? 

Version Originale teams have all made their requests for nationality or residence permits, except Kim who is already French since 2013! 

Vocabulary:

Cement: consolider/cimenter 

Gridlock/Logjam: embouteillage

To strand: échouer 

To give a leg up: donner un coup de pouce

Restitch: recoudre

Assuage: calmer/apaiser/dissiper 

Source: https://www.nytimes.com/article/brexit-uk-eu-explained.html