Businesses breathe easy after no-deal Brexit averted

Business breathed a sigh of relief after London and Brussels announced a post-Brexit trade deal, but called for greater clarity over services, and for the move to a new regime as smooth as possible.

“This will come as a huge relief to British business at a time when resilience is at an all-time low,” said Tony Danker, director general of employers’ body the Confederation of British Industry.

He added: “With a deal secured we can begin our new chapter on firmer ground.”

Britain has been one of the world’s worst affected by the coronavirus pandemic, plunging its economy into a historic recession and slowing growth.

The government expects a contraction of more than 11 percent in 2020 before rebounding to 5.5 percent next year.

New variants of the virus, which could spread more rapidly, have led to further stay-at-home orders across swathes of southern and southeast England, forcing already struggling businesses to close.

Britain’s departure from the EU single market could see it lose the equivalent of 4.9 percent of GDP over 15 years, according to government estimates in 2018.

A feared “no-deal” would have compounded that, given it would have meant World Trade Organization rules, with high customs duties, quotas and tariffs, on top of extra paperwork for business.

The devil of the deal will be in the detail, according to Danker, as the CBI and captains of industry prepared to scrutinise the treaty.

“Immediate guidance from government is required across all sectors,” he added, pointing out that the end of the standstill transition period ends on December 31.

“Above all, we need urgent confirmation of grace periods to smooth the cliff edge on everything from data to rules of origin and we need to ensure we keep goods moving across borders.”

Britain and the EU on Saturday published the full text of the post-Brexit trade agreement, which lays out detail on trade, law enforcement and dispute settlement among other arrangements after the UK leaves the single market and customs union on 31 December.

Despite the complexity of the long document, which includes explanatory notes and side agreements on nuclear cooperation and the exchange of classified information, both sides have indicated they will rush through the adoption.

David Frost, the UK’s chief negotiator, told reporters on Saturday the deal was “one of the biggest and broadest agreements ever covering not just trading goods, but services, aviation, road transport, Social Security, health cooperation, law enforcement”.

“This should be the beginning of a moment of national renewal for us,” Frost said, reiterating that the agreement allowed Britain to leave the single market and the customs union without aligning to the EU and the European Court of Justice.

As he tweeted out the 1,246-page agreement, which had been announced on Thursday after fraught negotiations that went right down to the wire, Frost’s EU counterpart Michel Barnier called the accord: “The result of many months of intensive and dedicated work.”

In the foreword to the copy of the text published by the UK government, British Prime Minister Boris Johnson said the agreement had been “carefully judged to benefit everyone” and preserve “free trade for millions of people in the United Kingdom and across Europe”.

“While we made our fair share of compromises during the negotiations, we never wavered from the goal of restoring national sovereignty,” he wrote.

Senior UK government minister Michael Gove wrote in The Times newspaper that the deal would allow Britain to bring “innovation and investment to parts of the country that have endured economic decline”.

He added there were still “significant changes” to be prepared for by businesses in the short term.

Britain’s parliament has been recalled to sit on 30 December so they can ratify the deal. A vote in favour is virtually assured after the UK’s main opposition Labour Party said its MPs would back it.

In Brussels, the European Commission has proposed the agreement be applied on a provisional basis until 28 February.

The European Parliament will be asked for its consent to the deal in 2021 and for the process to be concluded the Council, which brings together the executives of all 27 member states, must adopt the decision.

The bloc’s member states have indicated they will formally back the deal within a matter of days.

On Friday, EU ambassadors were briefed on the contents of the deal by Barnier where they agreed to write to the European Parliament of their intention to take a decision on the provisional application of the deal.