The European Union loses one of its member states on January 1, 2021 with the historic exit of the United Kingdom.
A divorce softened by obtaining a last minute agreement, on December 24, 2020, in particular to avoid the reintroduction of customs taxes and quotas for trade.
“European unity and firmness have paid off.
The agreement with the United Kingdom is essential to protect our citizens, our fishermen, our producers ”had then welcomed Emmanuel Macron.
For Paris, it was essential to protect trade.
In addition to being an economic partner in several key sectors such as aeronautics, automotive and fishing, the United Kingdom is France's largest trade surplus (12.5 billion euros in 2019).
If the worst-case scenario seems to have been avoided, the impact of the new trade and cooperation rules on the Franco-British relationship remains to be determined.
France 24 takes stock with Andreas Eisl, researcher specializing in European economic policy at the Jacques Delors Institute.
Customs barriers
France exports to the United Kingdom more than it imports
.
The
decision not to tax products was it essential for Paris?
Andreas Eisl
: This is of course a crucial element but it does not mean that trade will not be affected by Brexit.
By leaving the single market, the UK is no longer obliged to apply European standards to the products it manufactures.
But the products that the country exports to Europe must still meet these standards.
This new rule implies more bureaucracy, due in particular to the controls of production chains, and French companies will have to assess the additional costs that these steps represent.
However, the overall impact should be moderate because France's economic dependence on the United Kingdom is less and it can turn to its other European partners.
Fisheries Agreement
30
% of French fishing comes from British waters
.
What impact will this agreement have on
the French industry
?
Quotas on the different types of fish already exist to regulate fishing between the British and Europeans in these areas.
The agreement provides for a six-year transition period leading to a 25% cut in the EU quota.
There will therefore be no economic shock but an evolution over time.
From 2026, the agreement provides for annual negotiations.
However, the balance of power remains the same: the United Kingdom exports its fish on a massive scale to Europe and must make concessions in order not to see the reappearance of tariffs and quotas.
Strategic sectors
The
aircraft construction is the first pole of exchange between France and the United Kingdom
.
Will Brexit weigh on French industry in this area?
It is true that there is particularly strong economic collaboration on this subject, but it is a particular area where politics plays an important role.
Aeronautics is one of the strategic sectors, such as transport and the automobile, which benefit from a specific agreement to preserve trade.
But this industry is intrinsically linked to the military and, in this area, the impact of Brexit is more vague.
The UK and France are the two biggest military powers in Europe.
London is withdrawing from the EU and says it wants to regain its autonomy in defense.
This decision could push France, which defends the idea of a common defense for the bloc, to increase its military investments.
Global effect
The
Minister of the Economy Bruno Le Maire expects a limited economic impact for France (0.1% drop in GDP in 2021).
Do you share this analysis?
Trade with the United Kingdom is favorable to France but overall, they only represent a small part of its foreign trade: 50 billion out of 500 billion.
As for the impact of Brexit on these 50 billion, the effect will have to be measured over time according to British decisions.
It must be understood that Brexit is above all an ideological project based on a fantasized vision of sovereignty.
Boris Johnson claims to want to regain more competitiveness but this is not possible since Europe, his main trading partner, demands that standards be maintained.
He will now have to find a balance between ideology and economic reality.
For a country like France which has low growth, a loss of GDP, even 0.1%, is bound to be a problem.
But given the scale of the health crisis we are going through, this loss seems almost marginal.
What's in the post-Brexit agreement between the EU and the UK.
© france 24
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