The Future Relationship
- First of all, the negotiations for the Future Trade relationship with the UK will need to begin (and conclude) before the end of the year for there to be a trade deal in place for the EU and UK and so that business can avoid a cliff-edge scenario which would revert to WTO rules. Negotiations are expected to begin in March. The EU’s draft negotiating mandate is available on their website, along with useful Q&As on what happens next in their “Guide to the Negotiations”. Trade deals typically take several years to negotiate and conclude (on average between 3 and 7, depending on the degree of complexity.) The UK have said they will not seek an extension to the transition. If they were to change their mind, this would have to happen before end of June, after that point, the EU will not be able to facilitate an extension (I understand a Treaty change will be required)
- Therefore, if an extension is not requested, the EU and UK have between March and October to agree a new deal. After that, the deal will need to be ratified so that it can be in place for Jan 2021.
- As you will appreciate, negotiating such a trade deal will be very challenging, therefore, we are advising Chamber members to continue with their planning and preparation for No-Deal/WTO Rules. This includes reviewing your supply chain, logistics, whether you need to use the UK Land-Bridge (which will involve a significant degree of admin), certification, tariffs, Rules of Origin, Data Protection etc. Please continue to remind your members of the Brexit preparedness resources available on our website.
North-South Protocol and the Withdrawal Agreement
You will also be aware, that as part of the Withdrawal Agreement, a Northern Ireland/Ireland Protocol was agreed to ensure that no hard border would be on the island. Within this, it makes provisions for Citizen’s Rights, the Single Electricity Market and ensures that NI businesses continue to have full access to the EU’s Single Market, with the only checks on goods between EU and UK being at ports/airports, rather than at the border with the six counties.
A Joint Committee, made up of EU and UK officials is currently being put together to review how to implement the protocol so that it is operational following the end of the transition period.
Within the Protocol, while Northern Ireland remains within the EU’s Single Market, it stays inside the UK’s customs territory, which will pose some difficulty for NI companies, and Irish companies with all-island supply chains, who currently benefit from preferential treatment under EU FTAs. Depending on the trade deal, they may no longer be able to benefit from preferential treatment under existing FTAs. We would urge members who have an all island supply chain to review markets they currently engage with and assess how any preferential access might be impacted. We’re currently seeking greater clarification on this and a number of other matters, and we’ll keep you briefed. Please speak to your members and ask them to review how the Protocol might impact their business.
Preparing for Brexit
In the meantime, we must continue to plan for the worst outcome, in that there may not be a deal in place at the end of the year. For any chambers with questions on Customs clearance logistics or regulations, along with the many other dimensions involved in preparing for Brexit, please do not hesitate to get in touch. The team in Chambers Ireland will be happy to assist (or direct you to someone who can).