The UK's withdrawal from the European Union (EU) came into effect on 1 February 2020, following a decisive parliamentary majority by the Boris Johnson led Conservative Party, in the UK December 2019 general election.
On 23 June 2016, the United Kingdom voted in favour of leaving the European Union and notified the European Council of its intention, in accordance with Article 50 of the Treaty on European Union (TEU). Although the then Prime Minister, Theresa May, and EU leaders concluded a deal on the UK's withdrawal in November 2018, a majority could not be reached in the House of Commons.
The prolonged stalemate in the UK Parliament over the approval of the withdrawal agreement led the UK and the EU to agree on three extensions of the two-year negotiating period.
Under a new Prime Minister, Boris Johnson, the Conservative Party won the December 2019 general election by an overwhelming majority. Subsequently, on 23 January 2020, the UK Withdrawal Agreement Bill was given Royal Assent. In addition, the European Parliament gave its approval to the Withdrawal Agreement on 29 January 2020.
The UK's withdrawal from the EU entered into force on 1 February 2020. The agreement allows for a transition period from that date until the end of 2020. During this period, the EU and the UK will negotiate their future relationship in various areas; a trade agreement has been established as the highest priority.
The aforementioned transition period begun on the day of the official withdrawal and will last until the end of 2020. During this period - although no longer part of the EU institutions - the UK will remain in the customs union and the single market, as well as, within the jurisdiction of the EU Court of Justice (with some exceptions).
The negotiations, which will take place during the transition period, according to the European Parliamentary Research Service (EPRS), aim to reach agreements that will shape the future relationship between the EU and the UK in a number of areas, with a particular emphasis on trade.
In the Political Declaration that accompanied the Withdrawal Agreement, the EU and the UK state that they "agree to develop an ambitious, comprehensive and balanced economic partnership". However, the reality is that some important obstacles have emerged:
- The UK insists that it is not prepared to submit to the jurisdiction of the European Union's Court of Justice and demands autonomy in its regulatory and trade policies.
- The United Kingdom has indicated that it is seeking a free trade agreement similar to that agreed between the EU and Canada: comprehensive, but very different from the previous relationship.
The EU authorities have taken note of the UK's aims and objectives, but stress that the deeper the trade agreement between the two parties, the more the UK's regulations and standards need to be aligned with those of the EU.
Time will be of the essence
Clearly, for the EU, the alignment of regulations and standards is essential if a level playing field is to be preserved, on the basis that the EU and the United Kingdom are interconnected, neighbouring economies.
A confirmation of the above analysis leads us to the recommendation (COM(2020) 35) of the European Commission of 3 February 2020, where there is a Council decision authorising the opening of negotiations on the future relationship.
But in this context, time will be of the essence, because the United Kingdom's Withdrawal Act explicitly prohibits the extension, but the Withdrawal Agreement allows for an extension of the transition period. On the other hand, to allow for ratification, the trade agreement should be ready well before the end of the transition period. And in this regard, European Commission negotiators are insisting on including fisheries - a highly sensitive negotiating area - in the new economic partnership so that related provisions are in place by 1 July 2020.
Experience tells us that negotiations with limited deadlines can lead to limited agreements.
I think it is quite possible that we will see a very limited economic and trade agreement covering only the priority areas, instead of the single ambitious general agreement to which the Political Declaration accompanying the Withdrawal Agreement and the European Commission's recommendations in this area referred.
The United Kingdom's requirement to preserve independence in trade policy and regulation, among other things, however, is incompatible with the principles of the European Union's customs union and single market.
Jagjit S. Chadha, director of the National Institute for Economic and Social Research (NIESR), in an interview for the newspaper El Pais, considered that the decision of Prime Minister Boris Johnson not to extend negotiations for a trade agreement with the EU after Brexit, beyond the end of 2020, means that "there is not enough time for a meaningful trade agreement in goods and services and only gives time for an agreement that affects some goods". "Politicians should take more time to get a deal, limit the direct effect on trade and services and put in place alternative policies that limit the impact on the economy. All this takes time. And we are very concerned that we are leaving the EU without really knowing what is on the other side," he laments.
- Cîrlig C. and Puccio L., The future partnership between the European Union and the United Kingdom, EPRS, European Parliament, September 2018.
- Cîrlig C., The revised Brexit deal: what has changed and next steps, EPRS, European Parliament, October 2019.
- European Commission, Internal preparatory discussions on future relationship: free trade agreement, Task Force for Relations with the United Kingdom (UKTF), 13 January 2020.
- European Commission, Recommendation for a Council Decision authorising the opening of negotiations for a new partnership with the United Kingdom of Great Britain and Northern Ireland, COM(2020) 35, 3 February 2020.
- European Council, Guidelines adopted by the European Council (EUCO XT 20001/18), European Council (Art. 50), 23 March 2018.
- Future trade relations between the EU and the UK: options after Brexit. European Parliament Policy Department for External Relations, European Parliament, March 2018.
- Felbermayr G., Fuesr C., Gröschl J. and Stöhlker D., Economic Effects of Brexit on the European Economy, EconPol Policy Report (04), November 2017.
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