FX168 Financial News (Hong Kong) - On Wednesday (November 14), the highly anticipated Brexit agreement was finally released. Please click here for a link to the agreement documents.
It is reported that after five hours of emergency meeting discussion, the British Cabinet decided to support the draft agreement on Britain's secession from the EU reached yesterday. According to the procedure, the draft will be submitted to the British Parliament for further consideration. The UK proposed to start Brexit on March 29, 2019. The final implementation of the draft will be discussed by the British Cabinet, members of Parliament and EU member states respectively. Therefore, there is still a long way to go before Britain can successfully leave the EU and how to do so.
After the publication of the draft agreement, pound /The US dollar continued to rise, rising 0.7% to 1.3060.
(30 minute trend chart of GBP/USD, source: FX168 Financial Network)
The 585 page draft agreement will be closely watched in the coming days. The following are some highlights:
Border issue: There is no hard border between Northern Ireland and Ireland, but Northern Ireland needs to comply with some EU rules to avoid hard border;
Tariff issues: implement tariff and customs cooperation in the free trade zone, call for zero tariff on goods, and maintain a single customs zone until the Irish issue is resolved;
Irish agreement: the two sides will try their best to replace the Irish agreement by the end of 2020. The Irish agreement is only a temporary agreement;
Transition period of Brexit: At any time before July 1, 2020, the UK can request a "limited time" for the transition period of Brexit at one time.
The length of documents about future relationships is less than 7 pages. According to the report, the UK and the EU are seeking to establish a free trade area for cooperation in customs and rules: "Comprehensive arrangements have created a free trade area that combines in-depth supervision and customs cooperation, and is based on provisions that ensure a fair and open competition environment."
These words may cause the concern of the Brexits who do not want to supervise cooperation, and the measures on fair competition may make Britain subject to EU rules.
As Emma Ross Thomas of Bloomberg wrote, "There is a clear feeling in the document that we are moving towards a customs union. First through the Irish guarantee agreement, and then through future relations."
In addition, the government's summary of the draft agreement shows that the Parliament has played a role in deciding whether to extend the transition or take supportive measures.
But perhaps most importantly, on the controversial issue of the Irish border, the future relationship document said that the goal of both parties was to replace the so-called guarantee agreement.
Editor in charge: Guo Jian
