Context

On January 31, 2020 the United Kingdom left the European Union. This was made possible because of the withdrawal agreement.

About

• A few years ago, UK voted with 52% of British electorate choosing to exit European Union
• To ensure an orderly Brexit, EU and UK agreed on a transition period until the end of 20202 at least during which the UK would continue to participate in EU’s Customs union and in the single market to apply European Union law, even if it is no longer a member state.

What do you understand by free trade area?

• Here countries can trade with each other without paying tariffs.
• But, certain trade restrictions on specific commodities like agriculture may be there.
• Imported goods have to comply with the law of the land.
• Deliberations / Negotiations may take several years.
• Quite often, protectionist measures are taken by various countries.

EU follows single market

• It allows free movement of goods, services, money and people within the EU as if it is a single country.
• There are no quotas, tariffs or taxes on trade. EU single market accounts for around 20-25% of global GDP.
• Regulations cover wide range of issues like packaging, safety and standards and they are applicable throughout the region uniformly.
• Integration of “Single Market” for goods completed in 1992 and it is still in progress for services.
• It is possible to setup a business or take a job anywhere within it.

Still, 27 nation of EU are strong

• 27 Member States are still strong with a single market of 450 million citizens and more than 20 million businesses.
• It remains the largest trading bloc in the World.
• It is still the World’s largest development aid donor.

European Union’s response

• European Union said that, the new partnership between EU & UK will be finalised after thorough discussions among EU27 Member States.
• EU looks forward to have the terms and ambitions for achieving the closest possible partnership.
• It also said that they are bound by history, geography, culture, shared values and principles and strong belief in rules-based multilateralism. Today’s global challenges from climate change, cybercrime, terrorism, inequality require collective global response.