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25 Jun, 2020|

Brexit Latest: Where Are We Now?

It’s been almost 5 months since the UK officially left the EU on the 31st January 2020. Having dominated the news for many months of 2019 and before, things seem to have quietened down in recent months or perhaps just replaced by news of the Coronavirus.

But activity has been ongoing, with negotiations taking place to prepare for when the transition period ends in December 2020.

What is the Brexit Transition period?

It is important to remember that despite the UK leaving the EU on the 31st January, we entered a transition period lasting for 11 months. We remain in this transition period until the 31st December 2020. As a result, in 2020 things remain very much as they were when the UK was a member of the EU during the transition period. The UK remains a part of things such as the customs union and single market for the duration of the transition period for example.

The aim of the transition period is to give the EU and the UK time for new negotiations to take place regarding what the future relationship will look like. In particular, the focus will be on the trade deal between the UK and the EU

Will the transition period be extended?

There was always the option for the UK to request for an extension to the transition period if it was felt that more time was needed for the negotiations to take place.

But on the 12th June Michael Gove stated that he had ‘formally confirmed’ to the EU that a request to extend the transition period would not be made by the UK. Meaning all negotiations will need to be completed by the end of the year.

Officially the last chance to extend the transition period is the 1st July 2020. But it seems unlikely that this is going to happen.

What stage are Brexit negotiations at?

It is difficult to say exactly how much progress has been made in negotiations.

It has been widely reported that there have been a number of sticking points in negotiations. This BBC article highlights the following areas of contention with regards to a trade deal:

  • The structure of what is being negotiated – one agreement or many separate agreements
  • How to create a level playing field
  • Fishing agreements
  • Governance of the deal

There are also many other areas to discuss other than trade such as security, data sharing, licensing and regulation of medicines and aviation standards amongst many others.

What are the potential outcomes for Brexit negotiations?

If the transition period is not extended, which currently looks likely, then this ultimately leaves two potential outcomes

  • The UK-EU agree a trade deal – if a new agreement is made then trading under the new rules could begin as soon as the transition period ends.
  • The UK leaves with no trade deal with the EU – most likely meaning a default to trading on WTO (World Trade Organization) terms. And other areas also proceeding on a no deal basis.

It is thought that more intense negotiations are set to take place over the coming months to try and solve the current sticking points on both sides and move negotiations forward. What the outcomes will be and how things will conclude at the end of the year remains to be seen.

At Anthony Jones we appreciate the difficulties and uncertainties that businesses are facing at this current time due to both Brexit and Coronavirus. We are doing our best to keep on top of developments and updating our website and blog with information that we think will be beneficial to business owners. We are also working as normal, adhering to government guidelines, so if you have any questions about your business insurance do get in touch with us.