Brexit, a good deal for the French economy?
The Brexit deal could bring 0.2 percentage point of GDP to France next year, according to forecasts.
REUTERS - TOBY MELVILLE
Text by: Patricia Lecompte
5 mins
After 48 years of union, the divorce has been effective since Friday, January 1 at midnight, Paris time, between the United Kingdom and the European Union.
Since January 1, 2021, trade between the European Union and Great Britain is not quite the same.
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Before turning to the French chapter, let's first come back to
this free trade agreement
between the United Kingdom and the European Union, which is presented as the largest trade agreement in the world.
It should be noted that trade between the British and Europeans represents more than 700 billion euros per year and 450 million consumers.
The agreement reached provides that there is no quota or customs tax, so the British can continue to sell their goods and products as when they were members of the European Union.
Conversely, Europeans access the UK market in the same way.
This agreement is unprecedented, the European Union has never authorized access to its single market under such conditions.
120,000 French companies trade with the United Kingdom
Great Britain is an important trading partner for Europe and essential for France.
With the British, France achieves its largest bilateral trade surplus.
Last year it exceeded 12 billion euros.
Nearly 120,000 French companies trade with the United Kingdom.
Last year, exports reached 34 billion euros and imports just over 21 billion.
In the event of a
no deal
, the large French automobile, aeronautics, space, champagne and agrifood exporters could have paid up to 25% customs duty.
But neither customs tax, nor quota, does not mean without customs.
In fact, with Brexit, it is indeed the return of customs.
Abolished in 1993, they are reinstated on January 1, 2021. From now on, each transaction is accompanied by an import or export declaration.
Customs officers control trucks, and their goods, and if they are animals or imported animal products, sanitary and veterinary controls are systematic.
5 million trucks a year pass through Calais
For the British, France is the essential gateway to Europe.
Today, 70% of
cross-Channel trade
flows through the north of France.
Each year, 5 million trucks pass through Calais and 30 million passengers from the United Kingdom arrive in France.
These administrative formalities worry companies who fear a slowdown in the flow of goods, and fear an increase in paperwork.
► To read also:
Brexit: what changes (or not) for trade on January 1
Another contentious point, that of
fishing
.
It concerns all fishermen in the European Union, but insofar as France has the largest seafront in Europe, the stakes were high for French leaders.
Finally,
European fishermen
keep access to British waters until June 2026. During this transition, the European Union will have to gradually give up 25% of its catches, which is the equivalent of 650 million euros per year.
Beyond this period, the water division will be renegotiated every year.
An agreement hailed by Breton, Norman and Hauts de France fishermen, who regularly fish in British waters, because without access, their activity was threatened.
► See also:
Brexit: the United Kingdom opens a new page in its history, the British divided
City excluded from agreement
On the other hand, the City, European financial capital is not included in the agreement.
Regarding
the banking sector
, negotiations are far from over.
This is probably the reason why the City, which represents 80% of the British economy, is absent.
However, from this January 1 his activity will change drastically.
UK-based financial groups lose their financial passports.
Consequently, they can no longer sell their financial products in the Union.
To be able to work there, banks must open a branch in Europe.
Competition is fierce between Paris, Dublin, Frankfort and Luxembourg to welcome all these employees.
3,400 of them are expected in Ile de France.
For many specialists, this post-Brexit agreement is rather a good agreement for France.
According to forecasts from the Banque de France, the agreement reached before December 31 could have a positive impact of 0.2 points of GDP for the French economy next year.
Whereas a no deal would have made him lose the equivalent.
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