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Post-Brexit United Kingdom relations with the European Union
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As of September 2020[update], the United Kingdom's post-Brexit relationship with the remaining European Union members remains under negotiation. Following the UK's secession from the EU on 31 January 2020,[a] the UK continues to conform to EU regulations and to participate in the EU Customs Union during a "Brexit transition period" that UK legislation states must end by 31 December 2020. The UK government declined to extend the transition period, notwithstanding the EU's view that the timetable is unrealistic. It is possible that a trade agreement will not be completed and negotiations terminated, resulting in a no-deal Brexit. The August round of negotiations ended on 21 August, with "little progress" being made. EU chief negotiator Michel Barnier, noting how little time remained, said that it "seems unlikely" that an agreement can be reached.
The Brexit transition period began on 1 February 2020, and is due to end on 31 December 2020. This allows for a period of time to negotiate a bilateral free trade agreement between the UK and the EU.
Those definitive changes could create difficulties which might be under-estimated, according to Michel Barnier:
- re-introduction of customs formalities, as was the case before UK membership, for every product imported and exported to and from the EU and the UK
- end of financial passporting rights for the UK services sector
- end of Community preference to all goods, trade and people from the UK in EU member states
- UK product certification will no longer be recognized within the EU
- imposition of non-tariff barriers to trade, such as the possibility of lengthy delays at the border, import quotas and immigration restrictions resulting from the loss of EU citizenship for UK workers
Post-Brexit negotiations will try to create an ambitious pact between the UK and the EU to avoid disruption as much as possible, according to Michel Barnier.
UK membership of the European Economic Area
The UK could have sought to continue to be a member of the European Economic Area, perhaps as a member of EFTA. In January 2017, Theresa May, the British Prime Minister, announced a 12-point plan of negotiating objectives and said that the UK government would not seek continued membership in the single market.
The no-deal WTO option would involve the United Kingdom ending the transition period without any free trade agreement and relying on the most favoured nation trading rules set by the World Trade Organization. The Confederation of British Industry said such a plan would be a "sledgehammer for our economy", and the National Farmer's Union was also highly critical. Positive forecasting for the effects of a WTO Brexit for the UK cite other countries' existing WTO trade with the EU and the benefits of repossessing full fishing rights for a maritime island nation.
The EEA Agreement and the agreement with Switzerland cover free movement of goods, and free movement of people. Many supporters of Brexit want to restrict freedom of movement; the Prime Minister ruled out any continuation of free movement in January 2017.
- Northern Ireland remains legally in the UK Customs Territory, and is part of any future UK trade deals. This results in a de jure customs border on the island of Ireland, between Northern Ireland and the Republic of Ireland.
- Great Britain is no longer in a customs union with the European Union. Northern Ireland is also no longer legally in the EU Customs Union, but remains an entry point into it, creating a de facto customs border down the Irish Sea.
- Level Playing Field provisions applying to Great Britain have been moved to the non-binding Political Declaration, although they are still present for Northern Ireland within the protocol.
- EU tariffs (which ones are dependent on a UK–EU FTA), collected by the UK on behalf of the EU, would be levied on the goods going from Great Britain to Northern Ireland that would be "at risk" of then being transported into and sold in the Republic of Ireland; if they ultimately are not, then firms in Northern Ireland could claim rebates on goods where the UK had lower tariffs than the EU. A joint EU–UK committee will decide which goods are deemed "at risk".
- A unilateral exit mechanism by which Northern Ireland can leave the protocol: the Northern Ireland Assembly will vote every four years on whether to continue with these arrangements, for which a simple majority is required. If the Assembly is suspended at the time, arrangements will be made so that the MLAs can vote. If the Assembly expresses cross-community support in one of these periodic votes, then the protocol will apply for the next eight years instead of the usual four. If the Assembly votes against continuing with these arrangements, then there will be a two year period for the UK and EU to agree to new arrangements, with recommendations made by a joint UK–EU committee. Rather than being a fallback position like the backstop was intended to be, this new protocol will be the initial position of Northern Ireland for at least the first four years after the transition period ends in December 2020.
According to Michel Barnier, this might raise issues for Northern Irish companies which need the UK to deliver clarity on this topic.
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