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Policy & Compliance


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significant divergence between the UK and EU’s positions, possibly for public consumption and as a negotiating ploy. The Prime Minister is seeking a ‘Canada style’ trade agreement, covering goods but not services; he has also stated that he is willing to sever links with the EU without a trade deal. The EU has very publicly stated that a trade agreement is not possible if the UK diverges from EU standards. The EU is clearly concerned at the prospect of


Exiting from the EU – a brief summary


There should be no under-estimation of the scale and complexity of negotiations required to ensure the UK’s departure from the EU is orderly


A revised Withdrawal Agreement and Political Declaration were agreed between the UK and EU on 17 October last year. As a direct result, the UK left the EU on 31 January 2020. The Withdrawal Agreement provides for a transition period of 11 months until 31 December 2020. During this period the UK will remain in both the EU Single Market and Customs Union. As a consequence, the UK remains aligned to, and adheres to, all EU regulations including any introduced before the end of the year.


Transition period Membership of both institutions permits the free movement of goods without the need to submit customs declarations and other regulatory checks. In addition to this, the interim arrangement ensures the free movement of people, services and capital. The most important point to make is that the transition period allows for negotiations between the UK and EU leading to a future partnership. There are three key documents covering the


UK’s withdrawal from the EU: • The Withdrawal Treaty; • The Political Declaration setting out the framework of the future relationship;


• The Protocol on Ireland/Northern Ireland. The second document mentioned above is the


legal basis for the next stage of the forthcoming negotiations and covers all aspects of the future


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relationship. This is an exceptionally broad range of subjects and many regard the timeframe to conclude all the negotiations – by the end of the year – as highly challenging, if not impossible. It is pertinent to note that if the talks do not reach a satisfactory conclusion until November, or more likely December, it allows little or no time for anyone to prepare for new procedures and processes. At the moment we seem to have a UK


government that is much more relaxed about seeing some form of friction in trade between the UK and EU. On the other hand, the EU has clearly stated that the UK will not experience the same benefits as when it was an EU Member. It is clear that customs declarations will be re- introduced for goods moving between the UK and EU. An even larger potential issue is the requirement for a safety and security declaration to be completed. One point that is overlooked when the


government casually states that it is not concerned about “friction”, is that these requirements are a multiple of two. An export declaration from the UK requires an import declaration into Europe; add in additional checks for licensable goods and foodstuffs and there is substantially more friction than currently, which will inevitably drive up costs and, in some cases, cause delays. There seems to be a very public and


having a large former member as a neighbour that might seek a competitive advantage by implementing more liberal legislation. Hence the EU’s ambition to link continuing regulatory convergence with the free trade agreement negotiations. The EU has also issued a specific publication


covering the future relationship in transport, which is crucial from a market access viewpoint. This document covers all modes – air, road, safety and security. In addition, the EU-27 discussion documents for the future partnership in the area of governance, energy, foreign policy, security and defence have been published. Currently we are aware of the subjects that will


be included for discussion, but we are not aware of the finalised details of any such arrangements and how these will impact on those engaged in cross-border trade.


Future agreement It is likely that business will have little say in the overall future agreement between the UK and EU. Trade associations such as BIFA will be: • Highlighting that politically motivated decisions will have economic consequences and the government will have to take responsibility for these decisions. It cannot, and must not, be allowed to shift blame onto others;


• Seeking clarity regarding procedures to be adopted;


• Questioning whether there will be well-thought through new simplifications available to facilitate trade;


• Asking what support there will be for the sector; • Emphasising the incredibly challenging timeframes involved. Ours is a very diverse industry; some sectors


will benefit from Brexit whilst others are likely to be disadvantaged. However, all are very likely to find the change challenging, introducing procedures that will be new to them. Speculation based on what is in effect


guesswork is unwise, either unnecessarily raising hopes or causing undue concerns. What must not be under-estimated is the scale and complexity of the future partnership that will need to be negotiated in order to ensure the UK’s final departure from the EU is orderly.


March 2020


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