REGULATION Brexit David Wright, UKLA Director General

The United Kingdom is no longer a member of the European Union although during the transition period lasting until 31st December 2020, it will still follow EU regulations while it negotiates its future terms of trade with the bloc.

It also continues to be part of the single market and customs union, meaning there are no border checks on goods passing through its ports.

The United Kingdom’s position on trade is to negotiate with the Union a Canada-style free trade agreement. This would necessitate customs checks at the border but rule out full regulatory alignment in future, something the UK Government is keen to assert.

Over recent weeks EU Chief Negotiator Michel Barnier said a free trade agreement that replicates that of Canada would not be possible given the unique circumstances of the United Kingdom and its close proximity to the European Union.

French President Macron is also concerned that any trade agreement should retain the right of access for the EU to fish in UK waters whilst agriculture still remains a sticking point.

At the same time the UK is keen to protect the City of London’s position as a key regional financial centre.

In preparing for the end of the transition period, the UK has already concluded around 20 free trade agreements with, amongst others, Central America, South African nations, Switzerland, South Korea, Norway and Iceland.

An Australian-style points system for immigration is also being proposed by the UK from next year. This


system would recognise the qualifications, experience and skills of individuals whilst rewarding those who could meet the UK’s need to fill shortage occupation vacancies.

There would be no priority given to EU citizens in such a system and UK Home Secretary Priti Patel has said that around 70% of existing EU migrants would not meet the criteria to be eligible to work in the country.

Any agreement needs to be concluded by July 2020 in order to leave enough time for ratification by all 27 EU member states and the UK Parliament.

In the meantime the EU looks ahead to the next budgetary cycle to support its main policy platform for the next five years which will be centred around the new Green Deal.

Given the escalation of coronavirus across Europe this year, the existing timetable for negotiations seems very challenging. it is increasingly likely that negotiations will be deferred until the summer at the earliest, and the end of the transition period moved back to 2021.

The departure of the United Kingdom from the European Union leaves a 75 billion euro shortfall in the budget which will have to be met by increased contributions from other member states or a reduction in planned spending.

Retaining access to overseas markets for exporting finished goods and importing the inputs of production, would therefore make absolute sense by allowing both parties to support their respective economic ambitions through a comprehensive free trade agreement.

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