THE FUTURE OF EU – UK TRADE RELATIONS
Writer: Hendra Manurung, is doctoral candidate in international relations at Padjadjaran University, Bandung
The European Union and the United Kingdom continue to break the deadlock in trade negotiations due to the particular subject matter locked. If there is no agreement, their relationship deteriorated.
The future of trade relations between the UK and the European Union is not getting better. This is because several rounds of negotiations to direct telecommunications between British Prime Minister Boris Johnson and European Commission President Ursula von der Leyen have not been able to bridge the differences in perspective between the two sides. It is mainly related to the standard issue of export and import goods, fishing rights, and the issue of dispute resolution or legal disputes between both sides.
Further, another thing that also complicates the field situation is the plan of Paris against every clause of the EU treaty and the UK which is considered to sacrifice French fishermen and its national fisheries sectors.
In early September 2020, the British Government asked the European Union to take a stand on trade deals after Brexit. According to Boris Johnson, if there is no agreement or agreement then there is no free trade and it must be accepted by all parties.
Britain has officially left the European Union on January 31, 2020. According to Johnson, it doesn’t matter if the relationship between Britain and the European Union can be like Australia, where the two countries combine WTO rules with specific agreements for certain products.
Apart from the positive influences that Britain and member countries of the Commonwealth of Nations have had due to Britain’s membership in the European Union, in fact, there are still those who think that Britain’s membership in the European Union only limits Britain’s space for movement, especially in terms of trade interactions with other countries including with fellow members of the Commonwealth of Nations. These parties consider the European Union too restrictive to Britain, with many regulations that must be met.
This is the reason for the emergence of the term Brexit. The term Brexit is a combination of Britain and exit policy. The meaning of this term is a call for Great Britain to leave the European Union. Debates within the United Kingdom as well as within the Commonwealth of Nations over Brexit are inevitable. Those who have felt the benefits of Britain’s membership in the European Union are certainly against the Brexit call. Meanwhile, those who feel that Britain is limited in its space and too limited by the European Union with a series of regulations made by the European Union are pro parties to the Brexit call.
In 2016, this debate led to the holding of the UK Membership Referendum in the European Union which resulted in 51.9% of voters saying they supported Britain leaving the European Union and 48.1% of voters said they expected Britain to remain a member of the European Union.
Britain, which is a member of the Commonwealth of Nations as well as a member of the European Union, acts as an ambassador for the Commonwealth of Nations in the European Union. Therefore, Britain’s membership in the European Union indirectly provides its own benefits for member states of the Commonwealth of Nations.
The relationship between the Commonwealth of Nations and the European Union is a reciprocal relationship between the two supranational institutions in the European region. These two supranational institutions have a high commitment to their member countries.
Both the European Union and the Commonwealth of Nations have always played an active role in initiating relations and forging cooperation with other countries and international organizations. Currently, both the European Union and the Commonwealth of Nations are proactively pursuing the realization of free trade agreements with their partner countries and organizations.
So far, Britain’s membership in the European Union has opened a gateway of access for countries that are members of the Commonwealth of Nations to establish good relations and cooperation with the European Union. UK membership in the European Union means that countries that are members of the Commonwealth of Nations can be represented in the European Union even though these countries are not members of the European Union.
In the trade sector, the influence of Britain’s membership in the European Union for member countries of the Commonwealth of Nations is very clear. In fact, in 2016, nearly 80% of the member states of the Commonwealth of Nations were in the process of negotiating with the European Union on trade contracts. The advantages of this trade contract are significant both for the member states of the Commonwealth of Nations and for Britain itself. Britain’s membership in the European Union makes Britain at the forefront of strengthening relations between countries that are members of the Commonwealth of Nations and the European Union. Britain is involved in efforts to initiate negotiations on a free trade agreement between the European Union and Australia and New Zealand. Britain’s membership in the European Union also allows Britain to push the EU to realize a free trade agreement with India. Clearly, Britain’s membership in the European Union makes it possible for The UK can show its consistency in fighting for access to the European Union market for developing countries, whether they are members of the Commonwealth of Nations or that are not members of the Commonwealth of Nations.
However, London targets this agreement should to be completed on 15 October 2020. In addition to and is currently preparing rules for borders, seaports, and making strict regulations issues related to the marine and fisheries sector.
Thus, it will continue with the rules regarding aviation, transportation to scientific cooperation. British Prime Minister, Boris Johnson emphasized that there are still problems to be resolved in this trade agreement, although he did not give details on the matter.
The British government implements this agreement in accordance with international law and no political games are played by London. Thus, if there is no agreement, the potential US$ 900 billion in trade transactions between Britain and Europe could enter into the abyss of uncertainty sooner or later.
At present, if there is no agreement, it is certain that the economic relations of the two sides will deteriorate and become a heavy pressure on economic business entities and citizens of the European Union in general.
If the condition of the European Union described without Britain in 2020 (Eurostat, 2020), the area of the European Union is 4.22 million km2, reduced by the UK’s territory reaching 0.25 million km2; the population of the European Union (2019) is 447 million, also reduced by 67 million people in the UK; The GDP of the European Union (2019) reached Euro 13.95 trillion, and the UK GDP reached Euro 2.52 trillion.
For twenty years (2000-2020), the UK is well-known as one of the best countries for ease of doing business and is the 6th largest economy in the world. The UK is the number one destination for foreign investment in Europe. Current rates of investment into the UK technology sector are better than those of technology superpowers such as the US and China. London has more digital tech start-ups than any other city in western, central and eastern Europe.
The future of the UK and EU relations is based on mutual trust and belief. Thus, this trust is at stake in the final settlement of the trade agreement negotiations between the two.
The most difficult problem is how to guarantee fair and sustainable trade in the future; In addition to imposing sanctions if one of the contents of the agreement experiences a setback or a deadlock, for example, related to environmental or health standards issues, it must also be a serious concern and how the settlement mechanism can be mutually agreed upon.
The European Union is much concerned that London will cut regulations that could allow British companies to weaken the business expansion of European multinational companies.
Meanwhile, after Brexit at the end of January 2020, the UK is obviously focused on expanding global trade, especially looking for new markets in other parts of the world. Indonesia must be able to utilize and strengthen the potential for economic, trade, and investment relations with the UK.
It is expected that the UK and Indonesian trade relations will remain the same. In fact, the British government believes there will be momentum opportunities to boost bilateral trade cooperation with Indonesia after the Brexit, which is certain to develop great economic, trade, and investment opportunities for Indonesia.
The situation of solving the problem between the UK and the European Union is complex, but it requires a breakthrough, willingness, and goodwill from the British Prime Minister and the leaders of influential countries in the European Union to make efforts to find the best solution for all to avoid deadlock situations and not mutually profitable for all.
