Friday, January 31st 2020 was a historic day. At 11pm, the United Kingdom left the European Union thereby officially fulfilling the outcome of the 2016 referendum. However, ‘Brexit’ day doesn’t mean that Brexit is officially over. What follows now is a long and complicated process of negotiations before the UK can officially bid adieu to the EU.
Yes. The UK has ceased to be a member of the EU. British citizens are no longer EU citizens; there are no British MEPs or commissioner; British ministers will play no further part in EU lawmaking; no British prime minister will attend EU summits. The change is legal and constitutional.
The UK has entered an 11-month transition period during which pretty much everything will stay as it was while a future relationship is negotiated with the EU. Until at least the end of December 2020, the UK will remain in the EU’s single market and customs union and continue paying into its budget; people, goods, capital and services will continue to move freely across the bloc – including the UK – as before. Most people in Britain will not notice any difference to their daily lives.
The former Brexit secretary Steve Barclay has said Britain’s opening negotiating position for the upcoming talks will be published in early February: at present we know almost nothing of the specific detail of the UK’s demands. Few expect any detailed plan amid fears the Conservative party will attempt to limit public scrutiny of its position. The European commission, meanwhile, will publish its draft proposals for the next stage of negotiations on Monday after more than a month of consultation with member states, while Boris Johnson will unveil his vision of Brexit at the same time in a keynote speech. Negotiations will be divided into 12 strands with parallel talks on a rolling three-week basis. Talks on the future relationship are set to get under way on 3 March. Before then, the two sides will be in “scheduling and scoping” discussions to prepare for the talks.
The Brexit department (DExEU) has been shut down and a 40-person “taskforce” inside 10 Downing Street will run the negotiations on the UK side, headed by Johnson’s Europe adviser, David Frost, who will report directly to the prime minister. A special ‘Exiting the EU’ operation committee is expected to to play a key role in the talks. On the EU side, Michel Barnier, the bloc’s chief Brexit negotiator, will lead the negotiations.
The priority for both sides is to negotiate a free trade agreement that will form the basis of their new future economic relationship, with the objective being zero-quota, zero-tariff trade in goods. The EU has said it will only agree to that if the UK pledges zero dumping – in other words, undertakes not to lower social and environmental standards to outcompete the EU – but Johnson has said the UK is determined not to be bound by the EU rulebook. This is likely to prove a serious early stumbling block. Other clashes can be expected over the EU’s refusal to bring financial and other services into the trade deal, and over fish, as the EU seeks to link goods trade to continued access to British waters. The talks also include a raft of non-trade issues such as security, foreign affairs, data and cultural and educational ties, some of which are likely to prove equally tricky.
The EU has repeatedly said it will not be possible to negotiate an agreement covering all these areas in 11 months, and it seems likely some kind of bare-bones deal covering trade, fisheries and security will be prioritised. This would leave lots of unfinished business for 2021 but avoid the economic shock of ending the transition period without a trade deal. The withdrawal agreement allows for the transition to be extended beyond the end of December if necessary, but Johnson has repeatedly insisted Britain will not do this.
Assuming Johnson has not asked for an extension by June and no deal has been concluded on trade, the UK would fall back on basic WTO terms, which would mean tariffs on goods and border checks. The withdrawal agreement has removed most of the legal complications of a no-deal exit, but no deal on trade would undoubtedly have severe logistical and economic consequences, particularly for Britain.
There is a mammoth amount of work to be done this year by an already overworked and understaffed HMRC on new border arrangements across the UK, but particularly on the complex arrangements for Northern Ireland that – despite what Johnson has said about no checks being necessary – will affect all businesses trading on both sides of the Irish Sea. These will have to be in place by the time whatever trade agreement is concluded comes into force.
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