Distrustful EU lawmakers back trade deal with Britain
The European Parliament has overwhelmingly backed the post-Brexit trade deal between Britain and the European Union, clearing the last hurdle towards its ratification, while expressing clear mistrust of the British government. EU lawmakers cleared the trade and cooperation agreement (TCA) by 660 votes to five, with 32 abstentions, the parliament announced on Wednesday, a day after the vote.
Parliament's consent brings to an end over four years of acrimonious negotiations and debate as Britain ended 47 years of EU membership, but mistrust lingers.
European Commission president Ursula von der Leyen said she warmly welcomed the vote. "The TCA marks the foundation of a strong and close partnership with the UK. Faithful implementation is essential," she said in a tweet.
British Prime Minister Boris Johnson said this week was the final step in a long journey, providing stability to Britain's new relationship with the EU. "Now is the time to look forward to the future and to building a more global Britain," he said in a statement. The lawmakers also voted massively in favour of an accompanying resolution in which they describe Brexit as a "historic mistake".
The text talked of the trade deal's limited scope, with opportunities for Britain's largely service-based economy "vastly reduced".
Lawmakers condemned Britain's unilateral change in trading arrangements in Northern Ireland and urged the Commission to press on with its legal action. They also warned the European Union to be vigilant about British action on taxation, money-laundering and access for EU fishing boats to its waters. Britain left the EU at the end of January 2020, but remained in the EU single market until the start of 2021.
The deal struck in December ensures zero tariffs and quotas, but adds new checks and paperwork that hinder trade.
British exports
to
the
EU fell by 47% in JanuaryFebruary and imports by 20%, far more than the declines for any other EU trading partner.
EU lawmakers see the trade deal, including potential sanctions such as closing market access, as a tool to keep Britain in check. Christophe Hansen, one of the lawmakers in charge of the file, said the vote should be seen more as an insurance policy.
"At a market level, Europe has performed strongly year-to-date and it's clear that there has been an anticipation that the recovery will be quite sharp and strong," said Tom Dorner, investment director for European equities at Aberdeen Standard Investments. "You're still seeing a rotation in the market in favour of the more cyclical names like banks and autos." Investors, however, stayed away from making big bets ahead of the US central bank's policy announcement due at 1800 GMT.
Policymakers are widely expected to reaffirm their stance to keep monetary policy loose until enough economic progress has been made.