The European Union and the United Kingdom have finally reached an agreement on their new post-Brexit relationship, including a free trade agreement. The agreement, which came into effect on January 1, 2021, will have far-reaching economic and social consequences for both sides. In this article, we will take a closer look at the winners and losers in this new EU-UK free trade agreement.
1. The automotive industry: The automotive industry is one of the biggest winners of the new agreement. The agreement allows for duty-free trade in cars and car parts. This will benefit both the UK and the EU, as the automotive industry is highly integrated on both sides. The UK exports around 80% of its car production to the EU, while the EU exports around 10% of its car production to the UK.
2. The fishing industry: The EU has agreed to give up 25% of its current fishing quota in UK waters, which should benefit the UK fishing industry. However, UK fishermen will have to wait several years before they can access the full benefits of the new agreement, due to the phasing-in period.
3. Tech companies: The agreement includes provisions for the free flow of data between the EU and the UK. This means that tech companies on both sides will continue to be able to transfer data without any restrictions, which is crucial for the tech industry.
4. Farmers: UK farmers will no longer have to compete with heavily subsidized EU farmers, which should provide a boost to the UK farming industry. However, they will also have to comply with new rules and regulations to export to the EU.
1. Services sector: The agreement provides little clarity on the future of services, which make up 80% of the UK`s economy. The agreement only covers certain services, and does not provide for the free movement of people or mutual recognition of qualifications. This could result in reduced access to the EU market for UK service providers.
2. Financial services: The UK`s financial services sector, which accounts for around 7% of the UK`s GDP, has been largely excluded from the new agreement. The agreement only provides for limited access for UK financial services providers to the EU market, and it remains to be seen how this will impact the sector.
3. Small businesses: Small businesses, which make up the majority of businesses in the UK, will have to navigate new rules and regulations to export to the EU. This could make it harder for them to compete with larger businesses, which have the resources to handle the additional bureaucracy.
4. Consumers: The new agreement could lead to higher prices for consumers, particularly if there are disruptions to supply chains or if tariffs are imposed on certain goods. This could have a significant impact on low-income households, who are more sensitive to price changes.
In conclusion, the EU-UK free trade agreement will have winners and losers on both sides. While some industries will benefit from the new agreement, others will face challenges and uncertainty. It remains to be seen how the agreement will impact the overall economic relationship between the EU and the UK, and how it will affect businesses and consumers in the long term. As always, it will be important for businesses to stay informed and adapt to the changing economic landscape.