by Oleg Burunov
The UK formally left the EU on 31 January 2020, entering an almost year-long transition period that ended with the sides signing a post-Brexit trade deal after months of difficult talks and delayed deadlines.
Economically, Brexit will be over four times more painful for the UK than for the EU, the European Commission has claimed in its latest economic forecast.
“For the EU on average, the exit of the UK from the European Union on Free Trade Agreement [FTA] terms is estimated to generate an output loss of around 0.5% of GDP [gross domestic product] by the end of 2022, and some 2.25% points for the UK”, according to the forecast.
The commission also said that despite the sides managing to avoid worse damage thanks to the FTA in late December, bilateral trade barriers are still in place.
“While the FTA improves the situation as compared to an outcome with no trade agreement between the EU and the UK, it cannot come close to matching the benefits of the trading relations provided by EU membership”, the forecast pointed out.
At the same time, the commission touted the FTA as an agreement that stipulates a more trade-friendly option than standard trading terms in line with World Trade Organisation (WTO) rules.
“Compared to the ‘WTO assumption’ that was modelled in the autumn forecast, the EU-UK FTA reduces this negative impact for the EU on average by about a third and for the UK by about a quarter”, the commission underlined.
EU-UK Trade Deal
On 24 December 2020, European Commission President Ursula von der Leyen and UK Prime Minister Boris Johnson, announced they had concluded a post-Brexit deal on future relations between Brussels and London.
By signing the trade deal the parties managed to prevent the introduction of World Trade Organisation rules, including customs tariffs and full border checks for goods flowing across the English Channel.
The new deal became British law after receiving the approval of Queen Elizabeth II. The agreement came after months of tough negotiations stalled due to issues over fisheries access and a level playing field for social, labour, and environmental issues.