After nine months of hard negotiations, the United Kingdom and the European Union have reached a trade deal, averting a disastrous “no-deal” Brexit on December 31.
The UK and EU struck a historic and complex free-trade agreement, despite both sides maintaining over recent weeks that a “no-deal” scenario was very likely. Downing Street is calling this “the biggest bilateral trade-deal signed by either side”, as trade between the UK and the EU was worth £668 billion in 2019.
Ending the transition period of the UK’s exit from the European Union without a trade deal would have meant that trade between the UK and the European body would be subject to the World Trade Organization regulations. This would have included automatic tariffs, border checks and other impediments to free trade between the UK and its closest and largest trading partner. A “no-deal” Brexit would have also caused widespread job losses and an increase in food prices — erasing an additional 2% of GDP off a British economy that is already being pummeled by the COVID-19 pandemic.
However, the deal needs to be approved by the UK Parliament before December 31. Westminster is set to vote on the deal on December 30.