Xinhua recently reported that the British government finally reached an agreement with the European Union, leaving the “No-Deal Brexit” cloud behind. However, the Brits may have several tough challenges ahead of them. At the top of the list of troubles is Scotland being unhappy with the new agreement and the call for Scotland’s independence has intensified. The second major issue is the agreement’s lack of coverage of financial services. Britain is currently the world’s largest net financial service exporter. Forty percent of its financial services serve the EU, including banking, finance, insurance and telecommunications. It appears the EU may not allow the UK to keep the EU single market benefits without assuming obligations. The third big problem for Britain is the difficulties it has on trade agreements with other countries. Other than Japan and Canada, the British government has made little progress with key trade partners like the United States, Australia and New Zealand. Simultaneous talks are still on-going but moving very slowly. According to the British Office for Budget Responsibility (OBR), in the next 15 years, the British economic growth may be four percent less than would be the case if it stayed within the EU.
Source: Xinhua, December 26, 2020