Freedom is only conquered to exercise it. Boris Johnson still retains the ability to launch grand slogans, although the parish that celebrates them has been reduced. “We cannot suddenly decide that we want to be free and renounce the use of that freedom. My Government has a clear agenda to unite citizens, reduce territorial inequalities and extend opportunities throughout the country, “he explained to his allied newspaper, The Daily Telegraph, shortly after closing in extremis the trade agreement with the EU.
The first two weeks of Brexit have only brought trouble, but it has not been the apocalypse that was predicted through years of bitter debate. The very fact of having managed to avoid a disorderly rupture of ties with the EU, by signing a minimum treaty that avoids tariffs and quotas and lays the foundations for the future relationship, has eliminated the uncertainty that kept companies paralyzed. And the coronavirus crisis – with the economic hibernation that it has entailed – has camouflaged the first effects of divorce, which under normal circumstances would have been much greater and more striking. Some companies, such as the carrier DPD, temporarily halted their shipments by road to the mainland after verifying that one in five shipments was returned due to not having the customs papers in order. “It has been shown that we have an added burden with this new, much more complex procedure, and that we will need additional customs information so that their packages can reach Europe,” he informed his clients.
Some incidents have not gone beyond the anecdote, such as the zeal of the Dutch policemen in requisitioning their ham and cheese sandwiches from truckers from the United Kingdom, for not having passed the necessary phytosanitary control. Or the surprise of British fruit companies to discover that they had to pay extra tariffs (€ 100 per tonne) on bananas imported from Ghana. “The Agreement alters the rules of the game for merchandise trade and, although it does not impose tariffs, it creates a good number of non-tariff barriers. But this is normal because it is the consequence of leaving the EU customs union and cannot surprise anyone. Exporters will have to adapt to the new requirements, British standards and sanitary and phytosanitary regulations, and that will require an effort ”, explains Eduardo Barrachina, the president of the Spanish Chamber of Commerce in the United Kingdom.
The HM Revenue & Customs (the Tax Agency British) has estimated at almost 8,000 million euros the additional cost for the industry to fill out customs declarations and fulfill new requirements such as the demonstration of compliance with the rules of origin of the merchandise. Half of the UK’s international trade is with the EU, but in volume it accounts for two-thirds. Large containers arrive from Asia; from Europe (in the round trip), medium shipments that have been overwhelmed with the new procedures.
Most of the unpleasant surprises come by dropper, as the different sectors affected discover their new reality. For example, the almost 220,000 people who make a living from the activity generated by British musicians or actors have signed a petition to the Government to urgently negotiate their freedom of movement in European territory. The 60 days without a visa that any tourist enjoys is not worth them. They must carry out a specific procedure for each country where they go to work. A nightmare when planning an artistic tour. “After everything that this sector has suffered in recent months, how could this happen?” Asks Deborah Annetts, the president of ISM, the main association of musicians. “It is urgent that the value that music incorporates to our lives and our economy be fully recognized,” he continues.
The pandemic, especially the restrictive measures it has entailed and the economic decline it has caused, has meant that up to 1.3 million non-residents – mostly from the EU – have decided to return to their countries in 2020, according to the calculations of the Center of Excellence in Economic Statistics (ESCOE, in its acronym in English). Hospitality and universities were nourished by this population, who chose to pack their bags. “The option was to stay in the UK, without work, with little or no money, and face expensive rents, or return home to their families, with less cost and less risk of ending up with Covid-19. It was not a very complicated decision, ”says the ESCOE report. All these people leave a hole that will have to be repaired urgently when the virus weakens. But by then, the freedom of movement that the EU guaranteed will be gone. They will have to face the requirement of visas, work permits or university fees up to twice as expensive.
And then there is the City, as the financial center of London is known. The trade agreement between the UK and the EU left out the service sector, which accounts for 80% of the British economy. The Johnson government was quick to grant “equivalences” (the safe-conduct that recognizes the same level of requirement to the laws of a third country that regulate the sector) to European entities. The European Commission has taken its time. Some entities, such as Clearing Houses (clearance houses), they already work without problems, because certain operations in euros, due to their complexity and volume, have no other alternative than London. But for many other activities, the firms have decided to move with weapons and baggage to community territory, such as Frankfurt. British Finance Minister Rishi Sunak has announced a promising future for the sector once Brexit has been reached. The reality, to date, is that more than 8,000 senior managers have already left London. “We have embarked on a new journey. Let’s examine how to make the City the most attractive place to operate for new companies from around the world, ”announced Sunak.
Johnson’s future strategy is anyone’s guess. His efforts are focused on fighting the ravages of the pandemic, but few analysts doubt that, as soon as possible, he will begin to tempt the weaknesses of the trade agreement to take advantage of the UK’s disengagement with EU regulations. The newspaper Financial times revealed on Friday that Downing Street had already advanced to employers its intention to make the labor market even more flexible, and do away with the general rule of 48 hours of work a week. The Johnson government has been quick to deny the information, but no one has been surprised by the supposed movement of a market that is already more deregulated than the community one. The labor market can be made more competitive sector by sector, without apparently giving up the general commitment. How can the commitments of the Paris Treaty on Climate Change be fulfilled without having to be tied to investing in renewables, and betting more strongly on nuclear ones. “Now it’s just up to us to seize the new opportunities,” Johnson proclaimed. As long as they begin to show themselves, the British Government will endeavor to hide as much as possible “the potholes” that arise in the first steps of Brexit.