There won’t be a hard Brexit, but there is a Brexit. It is an EU amputation that will have economic, political and social costs. More for the United Kingdom in the short term than for the 27. The British economy has already suffered the effects since the 2016 referendum. In the realm of internal politics, Scotland could request a new independence vote, while Northern Ireland is now closer to Dublin than to London, with the economic border in the North Sea.
In the EU, certain sectors such as automotive or agri-food have breathed deeply when they learned that heavy tariffs would not be applied to their products. Even so, nothing will exempt these industries from customs declarations or phytosanitary controls that increase bureaucracy and costs that make their products less competitive.
Cars bought or sold from one side of the English Channel to another must prove that 50% of their parts are of British or European origin to avoid tariffs. In the case of electric vehicles, the batteries must be of European or British origin to avoid paying tariffs. And at this time, the largest producer of batteries in the world is China.
The agri-food sector must submit to health controls, and the customs formalities will not favor perishable foods.
However, the fishing and tourism sectors will be affected the most. Fishing quotas in British waters will be reduced by 25%, and new agreements will be negotiated from 2026. There are currently 88 Spanish boats fishing in the United Kingdom, and the trade agreement could lead to annual losses of €500 million. We will see some of the €5 billion earmarked by the EU for the sectors affected by Brexit reach the fishing sector.
Over 15 million British tourists visit Spain each year. Their decreased buying power, if the pound continues to depreciate, could reduce the number of trips to Spain and the expenditure by these tourists in sectors such as real estate or hospitality.
The air sector will also be affected, as airlines in which 50% of the capital is not in European hands will not be able to operate internal flights between EU countries. We will see how this situation affects Iberia, which is owned by IAG, controlled by British and third-country capital.
At the education level, the Erasmus program is a thing of the past in the United Kingdom and the tuitions for Europeans who want to study at British universities will at least double.
The financial sector, one of the most important for the British GDP, was left out of the trade agreement. British financial and insurance companies no longer have a British passport that would enable them to operate in the single market, and now they will require the agreement of the different states in order to do so under a system of equivalence.
British and European citizens lose with Brexit. Free circulation of people is a thing of the past and it will be necessary to travel with a passport with no less than 6 months of validity, and stays of more than 90 days will require a visa.
In addition, working on the British Isles is now more complicated, as it will require a high level of English and a salary of nearly €30,000. Professional qualifications will no longer be recognized automatically as they had been until now.
European health cards that are currently in effect can continue to be used until they expire, but the British government recommends taking out travel insurance.
In conclusion, no one has died, but there is a bit of a scare with the soft Brexit, and we will need to see how the different economic sectors and citizens adapt on both sides of the Channel. It is not as difficult as applying the rules of the World Trade Organization, but it will not be a bed of roses either.
Miguel Ángel Benedicto is professor of International relations in the Grado de Relaciones Internacionales