Brexit Update: Brexit is Near. Negotiations to Start.

Brexit Update: Brexit is Near. Negotiations to Start.

Kelsey Schenk - Marketing Officer
Kelsey Schenk
Marketing Officer

January 31st is getting closer. At 11:00 pm the United Kingdom will be leaving the European Union. Will Big Ben chime in celebration of Brexit?

It was wat Boris Johnson had hoped, but the bells are in repair and have no clappers. Putting them back to chime for Brexit could cost almost 6000.000 euros! However, fundraising is organised to put back the Bell in the Big Ben tower.

For businesses both in the UK and on the European mainland, there is still a lot of uncertainty as to what will happen. Negotiations for a new trade deal between the UK and the EU are about to start. It seems that already the knives are being sharpened…

The First Thing Disagreement: A Feasible Timeline

The prime minister insisted this week that it is “epically likely” that the UK will secure a full, comprehensive trade agreement with the EU by the end of 2020 and will legislate against any further extensions to the transition period.

Phil Hogan, the new EU Commissioner for trade who will play a central part in negotiations, warned on Thursday that both sides would not have time to reach an agreement on all aspects of the future UK-EU relationship by the end of this year.

Michel Barnier, the EU’s chief Brexit negotiator, warned earlier in January that London’s goal of securing a full free trade deal in 2020 was unrealistic.

As Business Insider reported.

What and When?

The European Commission will negotiate on behalf of the 27 nations that remain in the EU. They will present their plans and objectives to the 27 governments on February 25. The same will happen in the UK. At the end of next month, both parties will have an internal agreement, so the negotiations can start in March.

While Johnson believes there is ample time, the EU disagrees. And if you look at everything that needs to be done, and the available time it looks like a huge challenge. Many areas need to be covered: finance, customs, energy, security, to name a few. It looks they have until December, but the agreement needs to be translated and checked by lawyers. Keep in mind that there are over 20 different languages and multiple stakeholders and opinions in the EU. By October they should be ready for legal checks and translations if everything needs to be in effect in January.

Many Worries

There are more worries than just those about the timeline.

Brussels officials have spent this week briefing member states on the negotiations, stating that talks will fail if the UK refuses to keep European rules for all goods and services permanently.

Boris Johnson has categorically ruled that out and the UK Government is adamant that the EU will change its approach when the trade talks get underway.

Read the full article here.

And on a similar note:

Sajid Javid told the Financial Times in an interview Saturday that Britain’s regulations will not be aligned with the EU in the future and that those changes may hurt some businesses. Currently the EU is Britain’s largest trading partner.

“There will not be alignment, we will not be a rule-taker, we will not be in the single market and we will not be in the customs union — and we will do this by the end of the year,” he said, referring to a deadline at the end of 2020 for conclusion of what are expected to be contentious trade talks with the then-27 member EU.

“It will mean businesses will have to adjust to costly new checks, processes and procedures, that will act as a barrier to friction-less trade with the EU and may well result in price rises,” he said.

Read the full article here.

And the worries of the FTA are not only felt in the UK. Businesses in the EU would also really like to know what it is exactly what they need to get ready for.

The UK Freight Transport Association (FTA) has expressed its concern to the government about trading arrangements with the EU during the Brexit transition period.

There are a number of critical questions about the way goods will move across borders between the UK and the EU, and importantly the different arrangements that will need to be put in place between Great Britain and Northern Ireland. It is just not possible for logistics businesses to prepare adequately without these critical operational details.

Knowing there will be customs formalities and regulatory divergence is not enough; FTA members need to know exactly what this will mean and how new requirements will be enforced, particularly on the UK side. They also need clarity on the new arrangements for transport. As of today, there has been no response or clarification on the detail behind these critical issues.

Read the full article here.

Be in the Know

If you’d like to stay updated on all things Brexit you can follow the Brexit News page on our website. You can also keep an eye on our Company Page on LinkedIn.

And if you have any questions or concerns about your imports or exports, contact one of our experts.