CCR2 International Collections
The draft EU withdrawal deal: an update
As the terms of the transitional agreement start to become clearer, it is important for businesses to prepare
A draft of the deal for the UK’s withdrawal from the European Union (EU) on 29 March 2019 has dominated the headlines over the recent weeks, but what does it mean for the UK’s international traders? Of course, the deal will have to face various
hurdles before taking effect, including the critical vote in the House of Commons. With the deal drawing criticism from many
quarters in parliament, including MPs both in favour and against the idea of the UK leaving the EU at all, it remains extremely uncertain as to whether the government will win a parliamentary vote on it. What happens if the deal is rejected by
parliament, remains the question on everyone’s lips, but it would increase the likelihood of a no-deal scenario, as well as the
prospect of a general election or a second referendum. Hypothetically, should the deal pass, there would actually be no immediate change for UK exporters or importers to worry about. From 29 March 2019 to 31 December 2020, the UK would be in a transition, or implementation, period, during which EU laws would continue to apply. Throughout this period, the UK and
the EU would negotiate its long-term relationship: it is at this stage that the long- term trading conditions between the UK and EU would be established.
Future trade At the time of writing, a draft political declaration regarding the long-term relationship was due to be released.
This would aim to give an indication of
the nature of how trade will be conducted between the EU and the UK beyond the transition. The aim is for goods to be traded between
the UK and the EU without tariffs or quantitative restrictions, though whether checks will be required, and if these checks will be conducted at the UK border, remains uncertain. Much will depend on how well aligned the
UK’s rules on goods will be with those of the EU, and the extent of this alignment could have further ramifications on the UK’s ability to sign trade deals with non-EU partners. Regarding services, the aim is for the
agreement to liberalise trade between the UK and EU and the thought is that the regulations of the country, in which the service is provided, will be the basis upon which the services exported or imported are regulated.
Meaning for trade The major development regarding trade from the draft withdrawal agreement was in relation to the much written about ‘backstop’ arrangement – the terms for trade between the UK and EU in the event of a deal for the long-term relationship not being agreed in the next part of the negotiations.
What happens if the deal is rejected by parliament, remains the question on everyone’s lips, but it would certainly increase the likelihood of a no-deal scenario, as well as the prospect of a general election or a second referendum
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www.CCRMagazine.com December 2018
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