Brexit Transition Phase
With the UK’s departure from the EU under the terms of the Withdrawal Agreement on 31 January 2020, Brexit has now moved to the Transition phase.... but it's not yet clear what we are transitioning to!
It is helpful for businesses that the departure has taken place on a managed basis under the terms of the Withdrawal Agreement.
That said, the key issue in 2020 is whether the parties can agree an overall new relationship including a new Free Trade Agreement (FTA) before transition ends.
Until this is clear and what the terms of any such FTA deal are, the threat of a cliff edge, with trade in goods defaulting to tariff laden WTO terms, will persist.
This will be significant for many Irish businesses trading heavily with GB. It will also affect the value of GB based businesses that trade heavily with the EU.
For Northern Ireland based businesses who trade heavily with GB, important details are yet to be worked out on the operational aspects of the protocol and also the UK government’s commitment to NI that there would continue to be unfettered access to the GB market. That said it is helpful for all businesses operating on the island of Ireland to know that regardless of whether an FTA is agreed, goods can move freely across the NI / ROI border with no tariffs, duties or paperwork.
You can expect to hear lots of important discussions in 2020 on ‘level playing field conditions’, ‘rules of origin’, the workings of the Joint Committee on the Northern Ireland Protocol and what GATS means for services trade. These will be important ingredients in determining what outcomes emerge.
Also watch out for key discussions on fisheries, equivalence decisions on financial services regulations and adequacy decisions on data – the political declaration agreed between the parties calls for them to reach agreement on these matters during 2020.
While lots of crucially important Brexit related matters are yet to be decided, work can now commence where we know changes will occur such as clearing goods through Customs.
In this regard systems will need to be set up to capture information required for Customs clearances – these will be required irrespective of whether a new FTA is agreed or not.