At 23:00 GMT today the post-Brexit trade deal between the United Kingdom and the European Union will take effect.

After a referendum vote in 2026 where UK voters elected to depart the EU, three UK Prime Ministers and after four tumultuous years of brinkmanship negotiations and tensions, the year 2021 will mark the actual period of Brexit.

Yesterday, after joint negotiators reached a mutual agreement on the eve of Christmas, The UK Parliament voted overwhelmingly to approve a new trade agreement.  During the Parliamentary debate, UK Prime Minister Boris Johnson stated: “Brexit is not an end but a beginning and the responsibility now rests will all of us to make the best use of the powers that we have regained.

Reports regarding the UK ratification were quick to point out that some who voted against the deal included members of parties from Scotland, Wales and Northern Ireland, which some have interpreted to bode toward added tensions or even a breakup of the United Kingdom and is consists today.

European Commission President Ursula von der Leyen along with European Council President Charles Michel have also affixed their signatures of approval, along with the ambassadors from the 27 nations and member states that make-up the EU. Formal ratifications from the European Parliament and individual EU governing bodies will not occur until early in the new year, because many have not had the opportunity to review the 1,246-page treaty in detail.

As Supply Chain Matters has highlighted in prior Brexit focused commentaries, while goods will be able to traverse both trading regions generally tariff-free, British manufacturers, exporters and importers will now have to manage new processes related to customs documentation and required certificates of origin.

Concerning the sensitivities for having to have a physical border on the island of Ireland, this new trade deal reportedly treats Northern Ireland as an EU customs area, thus increased border checks among British ports will be called for on goods moving from the British mainland destined to Northern Ireland.


Initial Disruptions

As noted in out last published update, continued border disruptions are assured because of the compounding effect of current surges of COVID-19 coronavirus infection rates across Great Britain and in various EU countries. A discovered more contagious strain of the virus within the UK has caused additional travel and transport suspensions. Meanwhile, various manufacturers and businesses in the UK have reportedly not been able to adequately prepare for the new needs related to documentation and customs declarations.

Also yet to be clarified by businesses are professional qualifications of transport or other service-related employees.

According to reporting from The Wall Street Journal, electronic data is a further outstanding issue. While firms will have a moratorium to be able to transfer electronic data across the UK-EU border for up to six months from the beginning of this agreement, the EU will reportedly need to make a decision on whether UK data privacy laws meet EU standards going forward.

For sure, the Brexit trade arrangement will remain a topical agenda among multi-industry supply chain management teams residing among both regions for weeks to-come.


EU-China Investment Accord

While on the topic of trade, the EU and China have reportedly agreed in principle on an investment accord after a reported seven years of negotiations. The deal has won backing from the leaders of all 27 countries but must now gain an approval vote by the European Parliament.

According to reporting from Axios, this deal will open up both markets to investment and commit Beijing to ending certain unfair trading practices, strengthening economic ties between the EU and its second-largest trading partner. Some EU Parliament members had reportedly mounted a last-minute bid to block the deal over China’s use of forced labor, especially in the region of Xinjiang, where over 1 million Uighur Muslims and other ethnic minorities have been detained in “re-education camps.”

The accord addresses access by EU countries among China’s markets along with rules of competition. Reportedly, the pact will provide advantages that the United States gained when it signed a trade agreement with China which took effect in 2020.

With the UK now a separate trading nation, a separate deal that addresses trading and investment with China and the United States are likely going to be a subject of 2021 trade news.


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