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Post-Brexit trade deal fair result for "Made in Italy": analysts

(Xinhua)    09:45, December 30, 2020

ROME, Dec. 29 (Xinhua) -- The post-Brexit deal between the European Union (EU) and the United Kingdom (UK) was a fair result for Made in Italy exports, and positive news overall, Italian analysts and experts noted after assessing its key points.

Reached on Dec. 24, seven days before the end of the transition period, the agreement will govern the trade and security relationship between the two parties starting from Jan. 1, 2021.

It will allow the two sides of the Channel to maintain commercial relations, after nine months of intense negotiations and 47 years of UK membership in the European bloc.

UK BENEFITS MORE

This was positive for both the UK and European countries, although the former would benefit more from it, according to a comprehensive review published online by Italy's Institute for International Political Studies (ISPI).

"In 2019, the United Kingdom sold some 43 percent of its goods to the EU, and was therefore far more vulnerable than any single European country to a lack of trade agreement," ISPI analysts noted.

In contrast, "Single European countries... last year exported only 6.5 percent of their goods to London on average."

Of course, some EU countries are more worried than others, since they have a higher share of their exports going to the UK -- Ireland some 13 percent, or the Netherlands 10 percent, for example, according to the think tank.

"CHRISTMAS PRESENT" FOR ITALY

When it comes to Italy, the think tank noted that "a little more than 5 percent of our exports went to the UK last year. However, Rome had the third-highest trade surplus with London in Europe... which today makes the UK the fifth importer of Italian goods (at the global level)."

In the list of the ten largest single export markets for Made in Italy -- which comprises Germany, France, the United States, and China -- the UK has in fact consistently been ranking fifth between 2016 and 2019, data from the Ministry of Economic Development showed.

According to ISPI analysts, the Italian sectors most exposed to new duties in case of no post-Brexit deal would have been instrumental mechanics, textiles, chemicals, and agrifood products.

In addition to duties, ISPI continued, "a whole series of customs checks and formalities would have come into force -- although some will come into force even with the agreement."

"It may not be the best deal possible... but having reached an agreement, albeit in extremis, is a positive result," stressed Antonio Villafranca, ISPI director of studies and co-head of Europe and Global Governance Center.

"There will be time to criticize one point or another -- Westminster (UK parliament) and the European Parliament will soon have their chance -- but at the moment, the deal looks like a Christmas present," the senior analyst added.

AGRIFOOD SECTOR RELIEVED

The EU-UK deal met with relief from Italy's agrifood sector. "We are greatly satisfied for not having lost a market worth some 25 billion euros (30.65 billion U.S. dollars) in terms of Italian exports, of which 3.4 billion in food exports alone," said Luigi Scordamaglia, president of Filiera Italia, immediately after the deal was announced.

Filiera Italia is an association focused on promoting and protecting Made in Italy products, mainly agricultural, in foreign markets.

"The UK represents the fourth largest export market for Italian food (at a global level), and having avoided average duty rates of 3 percent, which could reach 30 percent in case of some products, is a victory for both sides," Scordamaglia said.

GLASS "HALF FULL" ON DEFENSE

Commenting on a specific sector of the EU-UK future relationship -- defense -- another think tank said the glass was "half full" for Europe and Italy.

"The agreement is good news for Europe's security," Alessandro Marrone, head of Defense Program at the Institute for International Affairs (IAI).

Nonetheless, he added, much will still be needed to provide "an adequate framework in the defense field."

A key point, the IAI analyst explained, was that the deal will allow the European Union to maintain a good relationship with the UK, which holds a permanent seat in the UN Security Council and has an independent nuclear deterrent.

"The agreement will improve both the mood among allies within the North Atlantic Treaty Organization (NATO) and the prospects of NATO-EU cooperation," Marrone said.

"It also has a direct and positive impact on police and intelligence cooperation, by confirming the exchange of fingerprint and DNA data, and the collaboration between Europe and UK authorities."

THE DOWNSIDE

On the downside, custom regulations and bureaucracies will be reinforced despite the deal, and EU and British citizens will no longer have the liberty to move and to reside beyond the respective borders.

"To all intents and purposes, two separate markets will be created, although much interconnected," the IAI defense analyst wrote.

"This means industrial and technological cooperation will become more complex, slow, and expensive, and this will have a certain negative impact on ongoing cooperative programs... and on many types of equipment which integrate British and Italian components."

The same would happen to all Italian aerospace, security, and defense companies operating on the British market, Marrone added. (1 euro = 1.23 U.S. dollars)

(For the latest China news, Please follow People's Daily on Twitter and Facebook)(Web editor: Wen Ying, Bianji)

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