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Tuesday, Jul 07, 2020

OK So Britain's Left The EU, What Happens Now?

OK So Britain's Left The EU, What Happens Now?

Everything you need to know – from fishing rights to trade deals.

Brexit Day is finally upon us. When the UK clocks strike 11pm (midnight in Brussels) on Friday, Jan. 31, Britain will leave the European Union. While the celebrations might be somewhat underwhelming, there's no doubt this is a momentous time in our political history.


It is fair to say our progress to this point has not been entirely smooth.

But you might not notice any changes for a while. That’s because Britain is in a transition period while it works out a free trade deal with the EU. This deal is vital if the UK wants to keep doing business with its biggest trading partner (in 2018, 45% of all UK exports went to the EU) with no tariffs or quotas.


British prime minister Boris Johnson has insisted that the transition period will end in December 2020 - a hugely ambitious timetable as trade deals typically take many years to conclude.

This allows the PM to claim victory on getting Brexit “done”: the mantra that catapulted him into Number 10 with an 80-seat majority in December’s general election. The reality is, however, that Britain is likely to agree a bare-bones trade deal with the EU, with many contentious technical areas to be thrashed out in the years to come.


So what will change during the 11-month transition period? Not much at all.

The UK will no longer be a member of the EU, but trade will continue as normal because it will remain in the customs union (where member states impose the same tariffs on goods from outside EU) and single market (which enables goods, services, people, and capital to move between member states). And the UK will still have to accept rulings from the European Court of Justice.

But there will no longer be any British members of the European parliament, and the UK government will have no seat at the decision-making table.


So the clock starts now in getting those trade negotiations started, right? Er, no. The EU says it needs a few weeks to agree its collective position ahead of the talks.

EU member states are expected to agree their negotiating mandate on Feb. 25, which means talks probably won’t get started until March. That makes it all the more difficult for the immensely complicated trade deal to be completed by the end of year.

The EU is highly sceptical that talks can be wrapped up by December because they encompass trade, foreign policy, and security, as well as fishing rights, aviation, medicines, energy, and education.


This is a problem, given the ticking clock.


Michel Barnier, the EU’s chief Brexit negotiator, said last year: “We cannot do everything in 11 months, we will need more time.” But he did say that “the principal elements” of a free-trade agreement could be agreed before the end of 2020.


Fishing rights will be the first priority in the trade talks, as the two sides aim to agree a deal on this by July 1, 2020. This has the potential for a major bust-up.

Johnson has insisted the UK will “take back control” of its waters after Brexit. The EU fears that European fishing boats will be denied access - which could devastate some coastal communities in northern Europe. Irish PM Leo Varadkar has said the UK needs to make concessions on fishing rights if it wants access to the EU’s financial services.


July 1 is also the deadline for Britain to request an extension to the transition period. The UK government is adamant this will not happen.

In fact, Johnson was so insistent on this point that he added a new clause to the Withdrawal Agreement Bill that ruled out any such extension. This would put an end to years of “deadlock, dither, and delay”, he told MPs in December. But shadow Brexit secretary Keir Starmer said it was “reckless and irresponsible”.

If a deal is not agreed by the end of the year, the UK and EU will be forced to trade on World Trade Organisation (WTO) terms -with tariffs on imports and exports likely to hit UK businesses hard.


The transition period also allows the UK to hold formal trade talks with other countries such as the US and Australia.

US treasury secretary Steve Mnuchin said last week he was “optimistic” that a US-UK trade agreement could be secured this year. “From a US standpoint we are prepared to dedicate a lot of resources,” he said. But the two countries have been at odds over a new UK tax on the revenues of tech firms, and Johnson’s decision to give Chinese giant Huawei a role in the UK’s 5G network.


Meanwhile, away from the trade talks, the UK government has a few other things to get on with -like designing a whole new immigration system, nbd.


There are a lot of unknowns with Brexit, not least how exactly the government plans to manage immigration once freedom of movement comes to an end. The UK and EU will also need to agree many complex areas of policy such as the licensing of medicines, supplies of electricity and gas, and data sharing and law enforcement.

Leaving the EU is one thing - figuring out how Britain works with the bloc going forward is a whole different ballgame.

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