Brexit Possibilities
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Withdrawal Agreement Ratified
- Withdrawal Agreement approved by EU & UK Government
- Rejected by Parliament three times and PM May resigned
- WA or variant may be ratified
- No deal Brexit on 31 October 2019 unless agreement or extension
- Deals only with Money, People, Transition and Backstop
- Accompanied by Political Declaration about Future Relationship
- Agreement on UK Financial Contribution to end 2020
- Agreement on the status of EU and UK citizens in the UK and EU
- UK leaves EU almost immediately but a Transitional Period begins
- Transitional / Implementation Period to end 2020
- May be extended by up to 1 or 2 years (decided by 30 June 2020)
- Future relationship to be negotiated in this period
- All EU rules continue to apply during this period
- The UK has observer status in EU institutions in this period
- The UK contributes to the EU budget in this period
- NI Backstop applies unless new agreement avoids hard NI border
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No Brexit
- The UK may unilaterally withdraw the notice to leave
- The UK remains in the EU
- All laws remain the same
- Preserves all existing trade agreements
- Political implications
- Legitimacy issues
- A second referendum likely to be necessary
- Likely continuing debate about the relationship
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No Deal / “Hard” Brexit
- Still the default option
- Both under EU and UK law
- Due to take effect on 31st October 2019
- Parliament seems opposed
- EU seems determined to avoid
- Involves a sudden big bang one time changes
- Numerous laws and trading rules change overnight
- Immediate customs duties
- Immediate customs processes and obligations
- Immediate regulatory controls
- Immediate cessation of single market rights
- Unpredictable unwinding and knock-on effects
- Negative economic effects very likely
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Backstop in Unapproved Withdrawal Agreement
- Contained in the unapproved Withdrawal Agreement
- Agreed by the EU and the UK Government
- Withdrawal Agreement rejected three times by Parliament
- A variant of it may be agreed
- Applies if future EU UK Agreement does not avoid NI hard border
- Applies if no EU UK Agreement at end Transition Period 2020 (+?)
- EU and UK must agree that test is met
- NI remains in EU Customs Union
- NI remains in most EU Single Market goods rules
- GB in customs partnership with EU
- GB in regulatory alignment with EU
- GB (not NI) could readily revoke these commitments
- No Financial Contributions
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Future Relationships
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An Economic Partnership/ Deep and Comprehensive Free Trade Agreement
- The UK Government’s preferred option
- Reflected in the EU UK future relationship declaration
- No customs duties on most goods
- Customs cooperation but declarations required on exports and imports
- Certificates of origin requirements
- Some regulatory checks
- The UK free to enter trade agreements with third countries –
- Higher alignment with the EU = reduced scope for /of trade agreements
- The UK has greater ability to regulate economic activity
- Level playing field rules/regulatory alignment likely
- No single market protections
- Some freedom of movement/mobility for workers
- Broad cooperation in important areas
- Limited freedom to provide services
- Facilitation of digital services
- Security partnership
- Cooperation in foreign-policy security and defence
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Membership of the EEA
- Same relationship as Norway, Iceland and Liechtenstein
- No customs duties on most goods
- Some Customs cooperation
- Declarations required for exports and imports
- UK freedom to enter trade agreements with third countries
- More extensive trade agreements v less EU alignment/harmonisation
- The UK becomes a rule-taker for many trade rules
- No / limited input into EU rule-making
- The UK remains in the single market
- EU free movement of persons and workers
- EU free movement of goods and investment
- Access to EU single market in services
- Subject to EFTA Court- indirectly binding
- Easily negotiated – EEA provides an existing template
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A customs union or partnership between the UK and EU
- The Labour Party policy
- No customs duties, customs controls nor origin checks
- Limited scope to enter trade agreements with third countries
- Greater power to regulate economic activity
- Level playing field rules/regulatory alignment
- No / very limited single market protections
- Broad cooperation in important fields
- Limited freedom to provide services
- Facilitation of digital services
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Customs Union plus Single Market
- Back to 1992 (more or less)
- Norway, Iceland and Liechtenstein status
- Plus customs union
- No customs duties
- No declarations of origin or customs control
- No/ very limited freedom to enter trade agreements
- The UK largely a rule-taker of many trade rules
- Free movement of goods
- Free movement workers (plus other categories?)
- Free movement of investment
- Access to the single market in services retained
- EEA provides a template to a large extent
- EU likely to accept EEA plus Customs Union
- EFTA Court- indirectly binding
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