By the end of 2020, such efforts bore fruit with a new investment agreement with China. The main goal for the EU was to support the ability of European companies to operate profitably in China. The EU claims that the new agreement creates a level playing field for Western european companies and ends pressured technology transfers. In add-on, the EU says of which the deal eliminates typically the requirement that European firms have a local spouse in China. Officials regarding the incoming Biden supervision in the United Claims counseled against the package on the hope of which the United States in addition to EU could take a new common stance on concerns related to China.
Meanwhile, the United Kingdom has exited the single market and the customs union. The single market, which encompasses the EU as well as Norway and Iceland, means free movement of not only goods and services but also people and capital. It also means common rules applied to certain industries and activities. The customs union means barrier free trade and a common external tariff with respect to other countries. The United Kingdom chose to exit both agreements in order to restrict and control migration, implement its own internal regulations, and make trade agreements with non-EU countries, such as Japan and the United States. The passage of a deal is a relief to many observers who worried that a no-deal Brexit would have been catastrophic.
Still, the British government’s own Office of Budget Responsibility says that in the long run, the current deal will reduce real GDP by 4% versus if the United Kingdom had stayed in the EU. The OBR said that a no-deal Brexit would have reduced real GDP by 6%. Meanwhile, the latest spread of COVID-19 is already disrupting trade. This will make it difficult to discern the true impact of Brexit. Having lost the United Kingdom and faced tensions with the outgoing US government, the EU remains determined to extend the realm of trade liberalization. In recent years, it has signed trade deals with Canada and Japan and initiated negotiations elsewhere.
There is much talk about a good economic decoupling of the particular United States and The far east. This reflects the increase of restrictions on industry, cross-border investment, technology move, as well as travel. Yet this appears that decoupling will be turning out to become an one-way street.
Finally, the particular deal might lead ALL OF US businesses to pressure their own government to negotiate an identical deal with China. Upon the positive side, the particular distribution of vaccines will be under way, offering the particular promise that, sometime later on in the year, the particular negative impact of the particular virus could ultimately ease off. Around the negative side, the particular virus continues to jeopardize economic stability, especially within those parts of the particular world where the break out has not been managed. This is true in the usa and the United Kingdom and threatens to become a problem elsewhere since the new strains of the particular virus spread further. The particular challenge for policymakers will certainly be to stifle the present outbreak, protect those that are disrupted by the particular outbreak, and accelerate submission of the vaccine.
The side evidently worries the EU-China deal will lessen US leverage in handling its grievances with Tiongkok. For China, the package with all the EU could end up being seen as a solution to generate space between the United states of america and the particular EU. In any occasion, the EU says that will the deal will not eliminate its ability to tackle human rights and geopolitical issues in China which are of importance to the particular United States.