Xinhua News Agency, London, May 19 (International Observation) "Brexit" transition period negotiations are difficult and epidemic situation adds new variables
Xinhua News Agency reporter Gui Tao Yu Jiaxin
The British government announced on the 19th that the United Kingdom will implement a new tariff system after the end of the transition period of "Brexit" at the end of this year, replacing the EU's external tariff system that has been implemented all the time.
At present, the "post-Brexit era" trade negotiations between the United Kingdom and the United States and the European Union are both encountering thorny problems. Whether the agreement can be reached before the end of the year is still unknown, and the new crown epidemic has added variables to the prospects for negotiations.
Limited progress in UK-EU negotiations
The third round of negotiations on the future relationship between the UK and the EU has not yet broken the deadlock. As in the previous two rounds, only limited progress has been made in the negotiations, and the differences between the two sides are still huge.
The United Kingdom officially “Brexit” on January 31, and then entered an 11-month transition period. During the transition period, the UK and the EU need to negotiate a bilateral relationship in the "post-Brexit era", otherwise the bilateral trade relationship will be returned to the WTO framework. The transition period can be extended at the request of the United Kingdom, but the United Kingdom must submit an extension request at the end of June this year.
David Frost, the chief representative of the British "Brexit" negotiations, said recently that it is still possible for Britain and Europe to reach an agreement before the end of June to achieve free trade between the two economies after the "Brexit", but The two sides still have major differences in the field of fair competition, and the United Kingdom cannot agree to the negotiation conditions proposed by the European Union in this field, because these conditions will allow the United Kingdom to continue to be subject to EU laws and standards.
The current EU requirement in the field of fair competition is that the UK should commit to maintain synergy with EU competition regulations for a period of time after the end of the transition period. This is because the European Union is worried that British companies may use their knowledge of European market rules, especially labor and environmental regulations, to introduce legal rules that are more conducive to British competition in Europe after the end of the “Brexit” transition period. The competitive advantage of EU companies.
Some analysts believe that the EU's above-mentioned requirements are unacceptable to the United Kingdom. If the crux of the problem is unclear, the British-European trade negotiations may be difficult to break through.
Anglo-American negotiations have many problems
The UK-US trade talks launched this month have also not progressed smoothly. Although the leaders of both countries hope to use an "ambitious" trade agreement to boost bilateral trade that has stalled due to the epidemic and use it as one of their political heritage, it is not easy to achieve results in the negotiations.
In terms of taxation, the United States has been in conflict with tariffs on steel, aluminum, aircraft parts and other European countries including the United Kingdom since 2018. The United Kingdom began levying digital taxes on large technology companies in April this year, which was opposed by the United States. Whether or not the existing contradictions in taxation can be dealt with directly affects the progress of the UK-US trade negotiations.
At the same time, in sensitive areas such as the safety standards for agricultural and sideline products, the British National Health System (NHS), the interests of both parties also conflict. The United States hopes that products such as genetically modified food crops, chlorinated chicken, and hormone beef will enter the British market. It also hopes that the British National Health Care system, which currently does not allow foreign capital to participate in operations, will be opened to American investors, but the British side is unwilling to accept these requirements.
Some economists pointed out that in view of the deep-seated problems, it is difficult for Britain and the United States to make concessions, and the possibility of the two parties reaching a substantive trade agreement is limited.
The epidemic adds new variables
In addition to conflicts of interest in economics and trade, the two EU-Europe and Anglo-American trade negotiations have also been affected by many uncertainties.
First, the two trade negotiation processes will affect each other. As the UK-Europe trade agreement may determine the areas in which the UK and third-party trade agreements need to comply with EU rules, the US side must also pay close attention to the trend of the UK-EU trade negotiations while negotiating with the UK side, which may delay the progress of the UK-US negotiations.
The Anglo-American negotiations will also affect the Anglo-European negotiations to a certain extent. Gary Young, an economist at the British National Institute of Economics and Social Studies, said that the EU is very clear that once the Anglo-American agreement is reached, it may pose a threat to the competitiveness of the EU.
Secondly, for the Anglo-American negotiations, the US presidential election is also a variable. Some analysts believe that if the UK and the US really want to finalize a trade agreement, they may have to wait until the end of the US presidential election in November.
Another factor that cannot be ignored is the new crown epidemic that is raging around the world. Some analysts believe that the epidemic has severely damaged the economies of Britain, Europe, and the United States. All three parties have recently committed to restarting the economy, and reaching a free trade agreement is the best choice for all parties.
However, the current three-party leadership is exhausted to deal with the epidemic and has no time to fully deal with the negotiations. Especially for the time-limited negotiations between Britain and Europe, if the negotiation process is delayed due to the epidemic situation, it will increase the possibility of Britain leaving the EU without a deal. Of course, it does not rule out that Britain and Europe have reached an agreement with "light" content.