Following four years of slow negotiations after the 2016 Brexit referendum and a final few weeks of deadlock in the talks, the two sides said they had reached an agreement in the afternoon of Thursday December 24.
The deal – which runs to 2,000 pages – will guarantee tariff-free trade in goods between the UK and the bloc after the UK leaves the single market on January 1, 2021.
Both UK Prime Minister Boris Johnson and European Commission President Ursula von der Leyen hailed the agreement, with von der Leyen stating it sets “solid foundations” for relationships between the two parties in the years to come.
“This deal means certainty for financial services and to our world leaders manufactures because there will be no tariff barriers to trade,” Johnson said in a news conference.
Von der Leyen said, “It is fair, it is a balanced deal, and it is the right and responsible thing to do for both sides.”
While businesses are still due to face higher costs for their exports, as the UK will no longer be part of the single market, some of the worst consequences of a no-deal scenario look to be avoided now that an agreement has been struck.
Market participants active in minerals and metals had feared severe disruption to logistics after January 1 in the event of a no deal, leading to a paralysis of trade. They already reported difficulties in moving their material across the borders and expect further delays in January even with an agreement due to custom checks.
“At first sight [the agreement] sounds potentially like a satisfactory outcome,” a UK chromium metal producer said.
“However, there will still be extra costs to bear and additional administrative burdens – issues that come to mind include Reach [Registration, Evaluation, Authorisation and Restriction of Chemicals], UK export/EU import documents, VAT may need to be considered depending on the incoterm used,” he added.
Over recent weeks, when a positive outcome of the last minute negotiations was still not clear, uncertainty surrounding Brexit prompted stockpiling of ferro-alloys and minor metals in case of a no-deal Brexit.
The UK is a major exporter of aluminium scrap and scrap products to Europe, as well as having a substantial vehicle production industry.
Last week, UK aluminium industry participants told Fastmarkets of worries international automotive manufacturers could close plants in the country in the event of a no-deal Brexit.
Fastmarkets’ assessment of the aluminium scrap LM24 pressure diecasting ingot, delivered consumer UK rose to its highest level since November 2018 last week of £1,490-1,560 ($1,963-2,098) per tonne on Wednesday December 16 amid these market jitters. The assessment surged further this week to £1,570-1,650 per tonne on December 23.