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British Brexit:Britain and the European Union have reached a historic post-Brexit trade agreement

Britain and the European Union have reached a historic post-Brexit trade agreement

British Brexit:Britain and the European Union have reached a historic post-Brexit trade agreement

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British Brexit:Britain and the European Union have reached a historic post-Brexit trade agreement

More than four years after Britain voted to leave the European Union, the United Kingdom and the European Union agreed on a new trade arrangement for Britain’s withdrawal from the European Union on Thursday, narrowly avoiding a potentially catastrophic failure to reach an agreement.

Britain and the European Union have reached a historic post-Brexit trade agreement
Britain and the European Union have reached a historic post-Brexit trade agreement

The two sides reached a “zero tariff-zero quota agreement”, which will help the smooth progress of cross-strait goods trade. This will ease the pressure on exporters from both sides, who will face higher tariffs and costs if no agreement is reached.

The trade agreement still needs to be approved by the United Kingdom and the European Parliament within the next few days, and a vote will be held in Westminster on Wednesday.

British Prime Minister Boris Johnson and European Commission President Ursula von der Laing praised the agreement.

Johnson said at the press conference: “The argument with our European partners is sometimes fierce, but I believe this is a good deal for the whole of Europe.”.

Von de Lehn said: “This is fair, this is a balanced agreement that is correct and responsible for both parties.” She added that Europe will continue to cooperate with the UK in all areas, and she will The UK describes it as a “trustworthy partner”. ”

After the news was announced, the pound rose slightly, but still rose 0.5% to about 1.3557 US dollars. Earlier this month, the renminbi exchange rate broke the 2020 high of 1.3624 US dollars, a level that has not been touched since May 2018.

*Tense negotiation*

About 47 years after joining the European Union, the United Kingdom officially withdrew from the European Union on January 31, 2020. In this way, it became the first country to leave the European Union. However, it agreed to continue to follow European rules until the end of 2020 in order to be able to negotiate more friendly terms of trade with 27 other countries.

Since March this year, the two sides have been engaged in intense negotiations to determine how business will operate from January next year. There are major conflicts over fishing, the rules of competition-known as the “level playing field”-and the governance of their new relationship.

According to the agreement, the EU has achieved a “level playing field”, which means that neither party can weaken the other through subsidies or similar means. But Johnson emphasized that the United Kingdom and the European Union will act as “sovereign equal” countries, and tariffs can be imposed if either party weakens the other.

In terms of fisheries-which seems to have caused the agreement to fall into the final stage-there will be a five-and-a-half year transition period during which EU fishing vessels will continue to enter British waters. Thereafter, negotiations on fishing quotas will be held once a year.

This period is longer than Johnson’s original proposal, but shorter than the 10-year EU proposal.

Johnson said that during this period, the share of British fish caught in British waters will rise from about half to two thirds.

Thursday’s news was a welcome development for businesses in the UK and Europe, ending the seemingly endless economic uncertainty for more than four years.

Von de Lehn said she was calmly satisfied with the agreement and, frankly, also relieved.

“I know this is a difficult day for some people, and it is also true for our friends in the UK. I want to say that parting is such a sweet sadness.” She added.

Michel Barnier, the chief negotiator of the European Union, agreed that this was a comforting day, but “a little bit sad.”

*Economic impact*

Citi analysts said the agreement will help alleviate economic chaos and may provide a starting point for constructive economic and political relations in the future. But they added that this would be a “significant step backwards from the existing relationship” and that “the hasty last-minute role may cause more quarrels.”

Susannah Streeter, senior investment and market analyst at Hargreaves Lansdown, predicts that the agreement with the European Union will promote the recovery of an economy that has experienced severe contraction in 2020.

“The surge in confidence and investment will help the UK overcome the 1% GDP shock. The Bank of England predicts that even if an agreement is reached next year, this will be the price of leaving the EU.” She said in an emergency research report after the agreement. .

“If the recovery continues without further pandemic setbacks and is helped by a rebound in global economic growth, this may herald a new and prosperous 1920s, reproducing the 10-year growth after the economic throes of World War I. .”

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