Article:
UK and EU Unveil Post-Brexit Trade Agreement
In a most recent development, the United Kingdom (UK) and the European Union (EU) officially revealed the complete text for the post-Brexit trade agreement. This critical document is set to govern the relational dynamics between the two entities once Britain formally exits the EU’s single market as of December 31st, 2020.
Examining the Key Points of the Trade Agreement
The comprehensive document delves into vast areas that include trade, law enforcement, and dispute settlement along with other provisions. Despite the complex nature of the document inclusive of explanatory notes and side agreements on nuclear cooperation and classified information exchange, both parties have voiced their intent to expedite the adoption process. The deal promises seamless trading in goods without the hassle of tariffs or quotas. However, this optimism is tinged with a certain level of uncertainty regarding the future relationship between the 27-member bloc and its former associate.
Unpacking Major Negotiated Aspects of the Agreement
Twelve months of negotiations centered around three crucial topic areas. ‘Level Playing Field’ implies that in order to conduct trade with the EU’s single market, the UK will have to adhere to similar rules and regulations to prevent gaining an unfair advantage over other EU businesses. ‘Rules of Governance’ will oversee the enforcement of any deal and lay down the punitive measures to be enforced if a party violates the mutually agreed upon terms of the agreement. The contentious issue of ‘Fishing Rights’ resolves with the agreement permitting free access to EU fleets to fish in UK waters, including up to six miles off the shoreline for a transition period of five years.
Reactions and Unresolved Queries Around the Agreement
Despite providing temporary solutions, this agreement has met with dissatisfaction from the UK’s fishing industry. Besides, it leaves several critical questions pertaining to large areas like security cooperation and access to the EU market for Britain’s vital financial services sector unanswered. The European Commission (EC) proposed a provisional validity for the agreement till February 28th, 2021. The EC, which congregates the executives of all 27 member states, is the executive arm of the EU, and the European Parliament will seek its approval for the deal in 2021.
Potential Opportunities for India Amid Post-Brexit Agreement
Against this backdrop, India might benefit by aggressively pursuing Free Trade Agreements (FTAs) separately with both the EU and the UK. Even though it’s too early to predict any direct gains for India from this agreement, potential opportunities could lie within service sectors such as IT, architecture, research and development, and engineering in both markets, as the EU-UK pact doesn’t cover these sectors.
India’s Stand on FTA Negotiations and Potential Benefits
India had encountered numerous problematic issues while negotiating FTA with the EU. However, post-Brexit, the UK may adopt a different stance on these matters, making it beneficial for India to continue FTA discussions. The Apparel Export Promotion Council (AEPC) suggested that an India-UK FTA could help eliminate customs duty disadvantages faced by domestic players in Britain. However, the Federation of Indian Export Organisations (FIEO) highlighted the absence of specific customs duty benefits for domestic goods under this agreement. As of 2019-2020, the bilateral trade between India and the UK receded to USD 15.5 billion from USD 16.9 billion in 2018-19.