A deal has been done, as this news website predicted it would. But what sort of deal is it?
Just the beginnings of one, according to those who represent some of the UK’s biggest industries, and there’s a lot more work to be done and analysis to be carried out on what exactly the deal will mean.
But mostly there was a sigh of relief, because quite frankly the alternative – a no-deal Brexit, would have been a much bigger disaster.
Stephen Phipson, Chief Executive of the UK’s leading manufacturer’s organisation, Make UK, said: “Industry will cautiously welcome the Government’s Christmas present of a provisional trade agreement that avoids the catastrophe of no deal; tariffs and quotas would have been a disaster for exporters, but we will need to go through this with a fine-tooth comb to understand exactly what the impact on manufacturers will be. The UK and EU must now urgently move to ensure provisional application from 1 January to ensure trade can continue as normal before formal ratification.”
ADS, which represents more than 1,100 businesses operating in the aerospace, defence, security and space sectors, has also welcomed the agreement – albeit cautiously, but warned that thanks to the 11th hour-agreement, it will be difficult for businesses to be ready in time.
ADS Chief Executive Paul Everitt said: “We recognise the deal does not meet all our ambitions and will examine the full legal text to ensure priority areas including aviation safety and chemicals regulation, customs and border control, and Northern Ireland are appropriately addressed.”
He added: “The Government must issue swift, clear and comprehensive advice to businesses on preparations, and work urgently to put all necessary arrangements in place.”
Julian David CEO of the UK’s tech trade association, techUK, said that the COVID-19 crisis has shown how interconnected the world is and the vital importance of international supply chains and cross border working to ensuring shelves are stocked, families and colleagues kept in contact and the best and brightest are supported to develop and deliver vaccines.
On the deal itself, he said: “While we wait to see the finer details, a deal will provide clarity on the terms of trade from 1 January 2021, helping businesses prepare for the end of the transition period. It will also support trust and confidence between the two sides so that any outstanding issues, such vital agreements on data adequacy and financial equivalence, can be resolved at speed.”
“As the UK seeks to build on this deal, negotiate new trade agreements with other partners and develop our role in multilateral institutions we must have this global mindset at the heart of our approach. This is not only central to growth of the internationally focused UK tech sector but will also help us better prepare for what comes next across the issues that affect people, our society, economy and planet.”
And what for the beleaguered retail sector? A big sigh of relief from Helen Dickinson, Chief Executive of the British Retail Consortium.
She said: “After years of campaigning for zero-tariff trade, we welcome the announcement of a free-trade agreement between the UK and EU. This protects consumers on both sides of the Channel from billions in import tariffs on everyday goods. Given that four-fifths of UK food imports come from the EU, today’s announcement should afford households around the UK a collective sigh of relief.
“The UK and EU Governments have taken a crucially important step in agreeing a zero-tariff agreement, to the benefit of customers all over Europe. They must now work to implement this new arrangement as soon as possible, ensuring there are no tariffs from Day 1, and finding new ways to reduce the checks and red tape that we’ll see from the 1st January. The BRC and the rest of the retail industry will be scrutinising the terms of this deal in the coming days.”
And what do our regional business support organisations think?
Phil Smith, CEO at Business West, said: ““Businesses across the region will breathe a sigh of relief. A No Deal would have been highly damaging, both in economic terms, but also in souring relationships between the UK and the EU and making it harder to come to common agreements that would help keep day to day trade flowing.
“The deal announced will still create new paperwork and barriers to trade with Europe. It is by no means perfect, but it does give an economic and political framework for future trade and a basis for economic co-operation.
“Despite this good news, business still have an urgent need to prepare for the new requirements that will be needed to trade with the EU from 1st January 2021. This includes a need for customs declarations, a different set of regulatory requirements and new ways of dealing with VAT, logistics, services and a whole host of other nuts and bolts issues. Business West has been giving guidance to companies on how to prepare through our web advice platform: www.tradingthroughbrexit.com
“Given the lack of time to prepare fully, many businesses will be hoping that there can be an implementation period, to stop a potential big adjustment shock at the turn of the year. Although the UK government has previously ruled it out, we hope both parties can come to a pragmatic arrangement that firms on both sides will need a period to get used to new rules and prevent serious economic disruption.
“This is the start of a new era. We hope that a period of difficult and painful political disagreement can now be drawn to a close. Given the pressing need for economic growth and recovery that we currently face, we hope we can now move away from posturing towards pragmatism and create a new and constructive relationship with our closest trading partner.”
All industry representatives agree that the Christmas Eve deal announcement is just the start.
Make UK’s Stephen Phipson added: “It is important that with a deal in place the UK can start to build for the future with our European partners but there are many months of further hard work yet to come. Furthermore, It is also crucial to recognise that, even with an agreement, companies will need time to adapt to the huge and complex changes ahead.
“Even without the pandemic it would be stretching credibility to believe the companies that export hundreds of billions of pounds worth of goods each year could adapt to a fundamentally different trading model in just one working week.
“It is in everyone’s interest for the UK and EU to jointly agree that with the legal start of this deal significant easements and an adjustment period, with review clauses if necessary, are vital. This will ensure the new systems and processes which will underpin this trade agreement, and the companies that will rely on them, can acclimatise successfully.”
And the beleaguered small businesses?
Federation of Small Businesses (FSB) National Chairman Mike Cherry said: “After such a torrid year, and during such a disrupted festive trading season, it’s a huge relief to see negotiators finally strike a deal.
“The work of looking through the detail of the agreement to map out exactly what it means for the small firms that make-up 99% of our business community now begins.
“As well as going through the terms of access to each other’s markets, we are keen to see the Small Business Chapter that we have championed and encouraged both sides to include.
“What we need from here is tangible, targeted support, including £3,000 transition vouchers that small firms can spend on the training and advice required to navigate a new trading relationship with our biggest export market.”
Finally, we hear from Tony Danker, CBI Director-General.
“We congratulate David Frost, Michel Barnier and their teams for this landmark achievement, and we praise the courage of our political leaders in reaching a deal.
“This will come as a huge relief to British business at a time when resilience is at an all-time low. But coming so late in the day it is vital that both sides take instant steps to keep trade moving and services flowing while firms adjust.
“Firms will immediately study the details, when they can, to understand the implications for their companies, customers and clients but immediate guidance from government is required across all sectors.
“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.
“The UK has a bright future outside the European Union and with a deal secured we can begin our new chapter on firmer ground.”