Exhausted but relieved, the EU and the UK announced on Thursday afternoon, Christmas Eve, that they had managed to agree on the terms of their future cooperation and a free trade agreement that will provide for zero tariffs and zero quotas on all goods that comply with the rules of origin.
On the brink of the abyss, the two parties were very close to give up, with the UK crashing out from the EU without any deal. It would require a last-minute direct interference by European Commission President Ursula von der Leyen and UK Prime Minister Boris Johnson to bridge the differences in the remaining sticking point, fisheries, an economically insignificant issue but loaded with symbolic value.
At the press conference yesterday afternoon, von der Leyen attributed the positive outcome to EU’s strong negotiation position, based on the fact that it is the world’s largest single market. “The UK would have been harder hit than the EU in case of a no-deal,” she explained and highlighted the huge step taken in the fisheries to reach the agreement.
The full agreement with its 1,200 pages has not been published yet, nor has the Commission yet published the usual list of Questions & Answers to explain in some more detail what has been agreed. In the meantime, an overview with two columns has been published, showing the consequences of the UK leaving the EU and the benefits of the EU-UK Trade and Cooperation Agreement.
Fish – free movement
Outsiders may wonder why it was so difficult to agree on fisheries and why the issue threatened to block the whole deal. The annual turnover of EU fishing vessels from British waters is only around €650 million, compared with €850million for the UK vessels. The UK vessels catch about 45 % of the fish, accounts for about 55 % of the total value, and exports 80 % of the catches.
In other words, a small but integrated sector where UK and EU vessels are catching fish, which do not any know any borders, and which would be become more expense if customs fees would have been imposed on the export. For the UK, it was about sovereignty over its territorial waters in a narrow sense of the word. EU coastal members insisted on continuing their fishing in the same waters.
According to the deal, UK becomes an independent coastal state and is free to decide on access to its waters and fishing grounds, in respect of its international obligations. It now leaves the Common Fisheries Policy – the EU’s joint legal framework ensuring equal access to waters, stable quota-sharing arrangements and the sustainable management of marine resources.
In the new arrangements, most will remain more or less the same with reciprocal access rights to fish in each-other’s waters during a 5.5 years transition period. During the transition period, the EU will transfer 25 % of its current fish quotas to the UK. EU vessels will continue to fish in UK coastal waters, including its extended territorial waters (6 – 12 nautical miles) if they already have been doing it.
At the end of the period, EU and UK will conduct annual discussions on fishing quota and access to each-other’s territorial waters. The assumption today is that the access will continue but any side can refuse access to its waters, in which case the other side might trigger compensatory measures, for example customs on fish.
EU Chief Negotiator Michel Barnier was satisfied with the fish deal and promised that, “the EU will be present alongside European fishermen to support them. This is our commitment”.
People – no free movement
“British fish will still be free to cross the channel but British citizens will have to ask permission before they can live, work, love, study or retire in an EU member state,” commented Roger Casale, a former British MP and CEO of citizens rights NGO New Europeans.
Barnier was also less satisfied with the deal on free movement of people and expressed regret that, “The ambition in terms of citizen mobility does not match our historical ties. And again, it is the choice of the British government.”
On the positive side, EU citizens with legal residence in the UK and vice versa UK citizens in the EU are protected by the Withdrawal Agreement and will keep all their EU rights for life. But new rules will apply as of 1 January 2021, allowing for some mobility but not for the free movement which is in place in the EU:
UK nationals will no longer have the freedom to work, study, start a business or live in the EU. Visas will be required for stays over 90 days. However, coordination of some social security benefits such as old-age pensions and healthcare will make it easier to work abroad and any pre-existing build-up of contributions to national insurance will not be lost.
For EU citizens, a non-discrimination clause will ensure equal treatment for short-term visas. Coordination of some social security benefits (old-age and survivors’ pensions, pre-retirement, healthcare, maternity / paternity, accidents at work) will also make it easier to work abroad and no rights will be lost.
“A bad trade deal is arguably better than no deal at all but will not fundamentally mitigate the negative consequences of Britain’s decision to leave the EU,” added Roger Casale. “One casualty of the deal will be the end of free movement between the EU and the UK. The EU is not just a union of states and markets, it is also a union of people.”