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Brexit: what's next?

Brexit: what's next?

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At 11 o’clock this evening, the United Kingdom will no longer be a member of the European Union.

We will enter an 11-month long transition period during which we will continue to follow EU rules and negotiate aspects of the future UK-EU relationship.

The implications for businesses in the electrotechnical and engineering services sector are complex, but not impenetrable. ECA has produced guidance for Members to gain a clear understanding of the Brexit process, changes they may need to prepare for, and new rules which may come into force.

For those who have not kept up with every twist and turn of the Brexit saga, below are the key points to be aware of, starting tonight.

The Withdrawal Agreement

  • The UK will no longer have any MEPs from 31 January, or a UK commissioner in the Commission, and the UK will no longer attend meetings of the EU Council (a grouping of all the EU heads of state).
  • There will otherwise be a transitional 'stand still' arrangement from 31 January until 31 December 2020. The UK will remain subject to EU law and rules during this period, as well as EU trade agreements. Freedom of movement will continue during the timeframe, as will full security cooperation.
  • There is a proviso for the transition period to be extended by either one year or two years, if agreed by 1 July 2020. PM Boris Johnson has though stated he will not extend the transition period.
  • The Brexit deal does though define the future relationship for Northern Ireland - i.e. it will remain in the EU's economic orbit due to being in the Single Market and Customs Union. Goods will therefore most likely need to be checked when going from Great Britain – Northern Ireland (regardless of what the UK Government may claim).
  • The Brexit deal also covers the 'divorce payment' and citizens’ rights, and these are guaranteed regardless of whether or not any further agreement is found between the UK and EU on trade, security etc.

Future arrangements

  • The UK and EU will start negotiating the future arrangement shortly after the UK has left the EU. Trade will be the key issue – with the EU linking market access directly to whether the UK (in practice Great Britain) will follows their four principles (freedom of goods, services, capital and people), as well as remaining aligned on regulations / state aid rules / standards etc.
  • The UK has clearly stated that freedom of movement will end (replaced by an ‘Australian points-based system’), so this will have implications for the future trading relationship.
  • There are also likely to be challenges finding agreement on fishing waters (a politically sensitive issue) and access for UK financial services to the EU market (which is important to the UK economy). It may therefore be conceivable that sector-by-sector deals are agreed, rather than one overarching agreement.
  • If no agreement is reached, at the end of the transition period, we would leave to trade on WTO rules (which include various tariffs etc.).
  • The UK cannot formally enter any new trade arrangements with other states (e.g. the USA) until after the transition period has ended but can hold informal talks in the meantime.

ECA and BEIS Brexit Briefing

ECA held a Brexit Briefing in 2019 with BEIS, where ECA’s CEO Steve Bratt and Rob Driscoll were accompanied by Fergus Harradence, the BEIS construction lead. Although the event was held in March 2019, the information shared remains relevant today. You can watch the full replay of the event below.

https://www.youtube.com/watch?v=zaBVhFH6mNI

For more information, visit www.eca.co.uk/Brexit

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