London, UK | Xinhua | Five years after Britain decided to leave the European Union (EU) in a referendum, Brexit remained a vexing headache for the country, though politicians said Brexit has been done.
Brexit has dominated British politics and divided the nation for years. On June 23, 2016, Britain voted to leave the EU by 52 percent to 48 percent.
After two general elections, intensive negotiations with the bloc and parliamentary wrangling at home, the country finally completed the divorce with the EU in January 2020 and secured a post-Brexit trade deal before Christmas that year.
On Jan. 1, 2021, Britain left the European single market and the EU customs union. Under the post-Brexit trade agreement, trade in goods will continue to be tariff-free and quota-free.
While the deal has averted large increases in trade costs, there are also new problems facing trade flows in the short term, such as increased checks, paperwork and delays.
Data from the Office for National Statistics showed total trade in goods between Britain and the EU decreased 23.1 percent in the first quarter, compared with the same period in 2018.
The Food and Drink Federation said British exports of food and drink to the EU dropped by almost half in the first three months of 2021 from a year earlier. Sales to Ireland, Germany, Spain and Italy all declined by at least half, with milk and cream exports plummeting 90 percent.
Compared with trade in goods, financial services are largely left out by the post-Brexit trade deal, analysts said.
Britain’s financial services will have much narrower access to the EU single market after losing the passporting right and will have to function through the so-called “equivalence” system, a policy that the EU can unilaterally revoke.
Rajneesh Narula, a professor of International Business at the University of Reading, told Xinhua there are difficult months ahead and it means banking, finance and insurance, and telecoms will have to be negotiated in the new saga.
As Brexit ends the free movement of people between Britain and the EU, there are concerns about the shortage of EU workers in Britain. The pandemic dealt another blow to the dwindling EU workforce in Britain.
British media reports said since the end of 2019, about 1.3 million foreign workers have returned to their country of birth to see out the pandemic.
Searches for work in Britain by EU-based jobseekers were down 36 percent in May from the average levels in 2019, particularly for low-wage sectors such as catering, care and warehousing, according to Indeed, a job-searching website.
Meanwhile, advertisements for jobs related to Britain’s food industry have exploded since February when the government announced its road map for lifting restrictions.
Restaurants and other non-essential retailers that reopened in April have had trouble of recruiting because of a shortage of overseas workers. Some businesses said they had to raise wages to attract British workers to fill the vacancies the EU migrants left.
Business leaders believe a lack of overseas workers would hamper the country’s economic recovery, as companies are forced to pay higher wages to attract staff, potentially leading to higher prices for goods and services.
In Northern Ireland, the impact of Brexit is even more acute. Northern Ireland is at the center of the post-Brexit trade dispute with the EU.
The Republic of Ireland and Northern Ireland shared the same EU rules on trade, so there were no checks on goods travelling between the two sides. Yet following Brexit, the border between Northern Ireland and the Republic of Ireland could become an external EU border.
As part of the Brexit deal, the Northern Ireland Protocol stipulates Northern Ireland remains in the EU single market and customs union to avoid a hard border between the region and the Republic of Ireland.
However, this leads to a new “regulatory” border between Britain and Northern Ireland, which exacerbates the conflict between pro-Britain and pro-independence groups in Northern Ireland.
Protests and riots raged for days in April in Northern Ireland. Edwin Poots, chief of the pro-British Democratic Unionist Party, was forced to resign after only three weeks in the post.
Earlier this month, British Brexit Minister David Frost said that talks with the EU on the Northern Ireland Protocol produced no breakthroughs. Stakes are high for both sides to find solutions.
In addition, Britain will continue to face the risks of Scottish independence after Brexit. With close economic ties to the EU, a majority of Scots voted for staying in the 2016 referendum.
In May, Scotland’s First Minister Nicola Sturgeon said she wanted another referendum on Scottish independence following her pro-independence party’s fourth consecutive victory in the Scottish Parliament election.
Observers warned that other old tensions including fishing rights could resurface after Brexit. The fishing dispute between Britain and France flared up in Jersey’s waters in May, resulting in both countries sending their navy vessels to monitor the situation.