InvestorQ : What does it mean, now that BREXIT is done and dusted and the deal is in place?
Ria Jain made post

What does it mean, now that BREXIT is done and dusted and the deal is in place?

Dia Deshpande answered.
3 years ago

The BREXIT deal finally happened just a week ahead of the actual date of severance of the UK and the EU. It was already reported in the press that Boris Johnson would make the all important announcement just ahead of Christmas as a gift to all Britons. What is now done is only the trade deal, with all other restrictions of severance remaining.

After 4 years of protracted negotiations that began almost in the winter of 2016, the BREXIT deal finally became a reality as UK and the EU agreed on almost all the points. It has started with a provisional free-trade agreement and what is important for the markets is that it will avert market chaos and any unnecessary turbulence at these elevated levels for now.

The deadline for finalizing the deal was 31 December so there was only one week left. There were strong expectations in the market of a Christmas Eve deal announcement, which is what eventually happened. Now the only thing left is that the respective Parliaments of the UK and EU must ratify the agreement before the end of the year, which is a formality.

The trade deal protects special rights to UK in its trade with EU, in terms of tariffs and quotas. However, the services restrictions will start right away. It will not be possible for financial services companies to be headquartered in UK and offer seamless services to the rest of Europe, as was happening for the last 25 years.

Also, there are still some pending issues on the fishing rights which should be sorted out in the coming days. There is thing to be noted. While tariff and quota free movement of goods between the UK and EU will happen immediately, it still means that customs checks, inspection, dual certifications etc will happen slowing flow of trade substantially.