The winners and losers of the Brexit deal

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Once again, Britain's fishermen feel betrayed.

"In the end, the Prime Minister [Boris Johnson] made the last offer and gave in to the fish, despite all the rhetoric and assurances," grumbled Barrie Deas, head of the National Federation of Fishermen's Organizations, in the Guardian.

Jane Sandell from UK Fisheries also complained that the contract did not contain any of the enormous amounts of fish that had been promised to fish in the coming years.

Access to British waters was one of the most controversial points in the negotiations with the EU, and it was notoriously difficult to satisfy the industry.

But elsewhere, too, the relief at the Christmas present was short-lived.

Companies and associations praise the Brexit agreement on Christmas Eve as an important step.

But there remained many obstacles that will cost the economy dearly.

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First of all, there is the indication of what is not taken into account in the trade agreement that has been laboriously won over months.

"At best, this can be the first version of a trade agreement between Great Britain and the EU," said Alex Altmann, partner at Blick Rothenberg in London and head of the legal experts' Brexit advice.

The rule that there will be no tariffs and quotas is good for trade and consumers.

However, many sectors are not or only insufficiently covered by the agreement, especially the large area of ​​services.

The economy is also concerned about the extremely tight deadlines.

“Time is running out for companies.

There is very little time left for those responsible to prepare their companies.

Guidelines for the implementation of this mammoth text by the government are urgently needed, ”said Jonathan Geldart, executive director of the Institute of Directors.

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“The deal comes very late for companies.

Working your way through 2000 pages of text in a few days and identifying the potential consequences is difficult to achieve.

Let alone get advice on individual topics, ”warned York-Alexander von Massenbach, head of the London office of the Luther law firm.

Hard cut with the rules of the EU

Four and a half years have passed since the Brexit decision.

Great Britain officially left the European Union at the end of January 2020.

For a transitional period of eleven months, however, everything has stayed the same, the basis of the future relationship between the EU27 and Great Britain was negotiated between Brussels and London during this period.

A number of questions were bitterly struggled to the end.

Issues such as fair competitive conditions, legal responsibilities, but also access for fishing companies to British waters threatened to let an agreement burst.

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On the afternoon of December 24th, a negotiated contract was finally presented.

It has more than 2000 pages, including appendices and footnotes.

The approval of the British and EU Parliament is still pending, but it is considered certain.

The agreement marks a hard cut with the rules of the EU in many places.

The UK government had already decided early on in the negotiations that the country had no interest in remaining in the customs union or in the EU internal market.

Security for exporters and importers

“The deal, with all its limitations, will be welcomed by most companies.

It takes away the uncertainty for exporters and importers ”, praised John Allan, Chairman of the Board of Directors of the largest British grocery retailer Tesco.

Above all, the agreement to waive tariffs is good news for retailers and consumers, said Helen Dickinson, managing director of the British Retail Consortium.

Above all, the automotive industry and agriculture would otherwise have had to adjust to significant price increases that would not only have depressed consumers, but would also have burdened the sales opportunities for many products.

The devil is in the details, however.

Although goods manufactured in the UK and the EU are exempt from customs duties, said Jonathan Main, partner at the MHA Moore and Smalley auditors.

"One of the most significant changes companies will have to deal with will be the requirements for rules of origin."

This can be illustrated using the example of the textile industry: A distinction is made between the manufacture of the fibers, the production of fabric from these yarns and the sewing of the finished item of clothing.

Only if two out of three steps have been taken in the EU or Great Britain does the item of clothing count as native and is therefore exempt from customs.

These rules of origin have a significant impact on the auto industry in particular.

Slow transport of food

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Additional difficulties threaten also with agricultural products.

In the future, you will need approvals, often also veterinary certificates.

This not only causes additional effort and costs for the manufacturer.

Many of the products will also be checked at the border.

Longer waiting times and delays in transport are the result.

Food supply chains "will be slower, more complicated and more expensive for the next few months, if not years," said Shane Brennan, head of the Cold Chain Federation.

He also called for a transition period, not only because of the tight time frame, but also because of the additional challenges posed by the pandemic.

Ultimately, even without customs duties, there is considerably more bureaucratic effort in foreign trade, for example due to the now necessary customs declarations for all imports and exports.

“The additional bureaucratic and financial effort will be considerable, especially for small and medium-sized companies,” warned legal expert von Massenbach.

Chemical and pharmaceutical companies also have to be prepared for additional work.

The British government wants to mirror the EU approval system for chemicals.

For many products, this should mean a second approval process in the other country.

Similar double tests can also be expected of pharmaceutical products with regard to quality and safety.

The joy is also subdued in the freight forwarding industry.

Licenses, approvals and transit rights continue to apply.

But British transporters are only allowed to drive to one destination for delivery in the EU and pick up loads at one station.

An EU-wide recognition of professional qualifications has failed.

Anyone who wants to work as a doctor, architect or engineer in the EU27, even as part of a temporary posting, must apply for recognition of their training in the respective country.

Return of visas

Securing fair competitive conditions, the so-called level playing field, was one of the particularly controversial aspects of the agreement.

When it comes to environmental standards and labor law, the UK now has a certain amount of freedom to turn away from EU rules, but runs the risk of losing access to the EU market.

Both sides have the option of reacting with tariffs on steps that put their companies at a competitive disadvantage.

"That was extremely important to the German economy," said von Massenbach.

The regulation should successfully prevent a low-wage country from developing in the immediate vicinity of the EU.

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In contrast, many other Brexit questions are not part of the contract.

Great Britain has already regulated the possibilities for immigration separately in a new immigration regime.

Anyone who travels to Great Britain for work or is to be posted there on a temporary basis will in many cases have to apply for a visa in the future.

Services, on the other hand, were largely excluded from the negotiations.

Rules for the financial services industry are being negotiated separately, as is a catalog of data transfers between states.

So the talks between Brussels and London are far from over.

The Christmas deal is just the beginning, said von Massenbach.

"Too many central areas were simply not part of the negotiations."