London, United Kingdom – The UK is bracing for a historic break from the European Union that will reset the relationship between them for generations to come.

More than four years after a slim majority of Britons voted in favour of quitting the EU, the UK will leave the bloc’s single market and customs union at 23:00 GMT on Thursday, December 31.

As the new year starts, the two sides must abide by the terms of a recently inked deal, which sets boundaries on their trade and security relationships.

On Wednesday, the UK Parliament speedily approved the deal, meaning it has now passed into UK law.

In short, Brexit marks the most momentous shift in the country’s recent history and will reverse decades of closer economic, cultural and social integration with the EU, its largest trading partner.

“Historically it’s really significant – it is the first major example of building barriers to trade and to cooperation that we have seen in the modern period,” Simon Usherwood, a professor of politics at the University of Surrey, told Al Jazeera.

“And there’s still a kind of uncertainty regarding whether this is about Britain retreating from the world and pulling up the drawbridge or becoming an international player in the broader sense and becoming a ‘global Britain’.”

The 1,240-page Trade and Cooperation Agreement was finally brokered a week ago, following months of fractious negotiations in the so-called transition period, which began after the UK’s formal departure from the EU in January.

After the deal was reached, a sense of relief was felt by both sides.

It averts the prospect of a chaotic divorce and ensures goods can continue to travel between the UK and the EU without tariffs or quotas from the beginning of 2021, smoothing trade worth hundreds of billions of pounds – and euros – a year.

Still, London’s imminent departure from Brussels’ orbit will bring about a raft of new rules and red tape for businesses.

How Britons and Europeans live, work and travel between the country and the continent will also change, with new visa regulations.

‘An economic rupture’

In the wake of the deal being reached, UK Prime Minister Boris Johnson spoke of a “newly, and truly, independent nation”.

He won by a landslide in the December 2019 election on a pledge to “Get Brexit Done”, after the issue effectively ended the political careers of his two predecessors – Theresa May and David Cameron.

Johnson has hailed the EU deal as a triumph, claiming he has achieved what he set out to achieve.

The UK, he said, has taken back control of its laws, borders, and fishing waters under the pact.

He also stressed that the UK will be the “best friend and ally the EU could have” as the pair reorient themselves to their new relationship.

But opponents of Brexit say the divorce threatens to break up the UK, harm the economy in the long term, and diminish its global standing.

National economic output will shrink by 4 percent over the next 15 years as a result of the UK’s departure from the EU’s single market and customs union, according to the UK’s financial watchdog, the Office for Budget Responsibility (OBR).

EU economies are also predicted to take a hit, although the impact of Brexit will vary considerably across the bloc.

Ireland, Belgium and the Netherlands are expected to be most affected, as they do the most trade with the UK.

Analysts said that even with the agreed trade deal, Brexit would effectively result in a lose-lose financial outcome for both sides.

“It’s an economic rupture … and the biggest one-day change in trading relations in modern history,” David Henig, director of the UK Trade Policy Project at the European Centre for International Political Economy think-tank, told Al Jazeera.

“There’s 660 billion pounds [approximately $898bn] worth of trade which tomorrow is under new, more restrictive rules,” he said. “Just how much impact it will have we simply don’t know – it’s an entry into the unknown.”

Henig and Usherwood also expect continued political fallout next year and beyond, citing possible flash-points: disruption accompanying the implementation of the trade deal, the agreement’s protocol for Northern Ireland, and its implications for Scotland where the ruling nationalist party is pushing for a second referendum on independence.

There will also be further wrangling between London and Brussels, with many aspects of the pair’s overall future relationship still left to be worked out.

“If you assume the end of Brexit is when there is a new, stable relationship with the EU then we are not yet at that point,” Usherwood said.

US trade officials on Wednesday announced they were increasing tariffs on certain European Union products, including aircraft-related parts and wines from France and Germany.

The decision comes amid an ongoing civil aircraft dispute between Washington and Brussels.

United States Modifies Tariffs on EU Products in Large Civil Aircraft Dispute

The United States is adjusting tariffs on certain products imported from the European Union.  The U.S. was authorized in October 2019 to impose additional duties on approximately $7.5 billion in EU products as a result of the WTO Large Civil Aircraft litigation.  The United States implemented its authorized countermeasures in a restrained way and used trade data from the prior calendar year to determine the amount of products to be covered.  

In September, 2020 the EU was authorized to impose tariffs affecting $4 billion in U.S. trade as a result of related WTO litigation.  In implementing its tariffs, however, the EU used trade data from a period in which trade volumes had been drastically reduced due to the horrific effects on the global economy from the COVID-19 virus.  The result of this choice was that Europe imposed tariffs on substantially more products than would have been covered if it had utilized a normal period.  Although the United States explained to the EU the distortive effect of its selected time period, the EU refused to change its approach.  

As a result, to keep the two actions proportionate to each other, the U.S. is forced to change its reference period to the same period used by the European Union.  However, in order to not escalate the situation, the United States is adjusting the product coverage by less than the full amount that would be justified utilizing the EU’s chosen time period.  

The EU made another choice that unfairly increased the amount of retaliation.  The EU calculated the amount of trade to be covered using EU-27 trade volume (i.e., excluding UK trade).  The effect of this was to unfairly increase the retaliation for the 52 days in which the UK remained within the EU for tariff purposes.  The EU needs to take some measure to compensate for this unfairness.

The products subject to the additional tariffs include aircraft manufacturing parts from France and Germany, certain non-sparkling wine from France and Germany, and certain cognac and other grape brandies from France and Germany.

Additional details will be provided in a forthcoming Federal Register notice.

OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE

Blaming the victims is never a good look. As Britain finally leaves the European Union, 1,651 days after the Brexit referendum of 2016, we should try to remember that 48% of the turkeys didn’t vote for Christmas.

Brexit was not exactly a national act of self-harm; it was really an attack by the nostalgic and nationalist old on the young. Some 60% of British over-65s voted to leave the EU, but 61% of the under-35s voted to remain. Having had four years to think it over, most British now think it was a mistake — by a 48-39 majority, according to a YouGov poll in October. Too late. Boris Johnson is prime minister and he dares not anger the English ultra-nationalists on the right of his own Conservative Party. After months of the amateur dramatics that accompany any Johnson decision, on Christmas Day the United Kingdom concluded a pathetically thin “free trade” deal that reflects the real balance of power between the EU and the UK.

It looks pretty good for manufactured goods and commodities, which make up 20% of Britain’s GDP: no tariffs, no quotas. But the EU sells far more stuff to the UK than the other way around: it has a US$45 billion (about 1.3 trillion baht) trade surplus in goods. Of course, it made a deal on that. By contrast, there is no trade deal at all in services, which account for 80% of the UK economy and used to produce a $112 billion surplus for the UK. The UK is entirely vulnerable to whatever restrictions the EU may choose to apply to its banks, insurance companies and providers of other professional services.

Mr Johnson will smear lipstick all over this pig of a deal and declare it a triumph. Those who want to believe it will do so and the only early evidence of the huge defeat that it really is will be some delays at the ports as customs officers learn their new jobs. The real bill will come in later and almost invisibly, in lost trade, investment and opportunities.

The last official estimate was that 15 years from now the British economy will be between 5% and 7% smaller than it would have been as an EU member (but still a bit bigger than it is now). That’s not the raw material for a counter-revolution — and besides, any projection about the economic situation in 2035 is really pure guesstimate. One Covid more or less could make just as much difference as Brexit.

All one can say is that the British economy will not “prosper mightily” outside the EU, as Mr Johnson promised, but it won’t collapse either. And then, in due course, the younger, pro-EU Brits will become the majority thanks to the magic of generational turnover. But until then, if Britain comes knocking at the EU’s door asking to be allowed back in, Brussels should say “no”.

What really happens on Dec 31 is that the EU is finally freed to develop in the way that its other major members clearly want. The goal of “ever closer union”, anathema to English exceptionalists, is back on the agenda. There is ambivalence about the idea of creating a semi-federal European super-state, but in a world where democracy and the rule of law are under siege, most people can see the need to strengthen the EU. Last July the EU’s leaders took a huge step in that direction: for the first time they agreed to borrow collectively on the financial markets.

France and Germany were all for it, and Italy and Spain needed the money to finance a trillion-euro aid programme to help them through the coronavirus crisis. Those four countries now contain more than half the EU’s population, and they outvoted the “frugal four” (the Netherlands, Austria, Sweden and Denmark) that opposed taking on debt to support “feckless” members. If Britain had still been a member, it would have vetoed the measure because it infringed on the UK’s sacred “sovereignty”. French President Charles de Gaulle, who vetoed British applications twice in the 1960s, was right: England does not have a “European vocation”, and it should not be allowed in.

The financial precedent that was set in July opens the door to a future EU that acts much more like a state. Even a common defence budget is now within reach — not something vital in military terms, but a European army would be an important symbol of unity. The US may be back soon, but the world could certainly use a second powerful advocate for democracy and the rule of law. Brexit may be giving us just that by freeing the EU to move on, and we should be grateful.