UK

Brexit gets an "oxygen bubble" until December 2020

Brexit

The UK and EU negotiators have reached a technical agreement on the Draft Withdrawal Agreement.

Posted on Nov 17 ,13:11

Brexit gets an "oxygen bubble" until December 2020

Brexit negotiators have reached a technical agreement on the Draft Withdrawal Agreement that provides a transition period up to at least 31st December 2020, during which the UK would continue to participate in the EU Customs Union and the Single Market (with all four freedoms) and all Union policies.
"This will avoid the need for any new checks between the UK and EU or the introduction of tariffs on trade between the EU and UK. The draft agreement also means that the UK would be bound by existing regulations. This will provide assurance to our export markets around the world that the UK will still be meeting all the current rules and regulations. However, until the agreement has gone through the legislative stages in both the UK and the EU, uncertainty still remains for our members making it difficult to plan and agree on contracts", commented the International Meat Trade Association (IMTA) UK in a press release.
At the same time, the British Institute for Government informed that "a single customs territory between the EU and the UK will come into force if there is no deal by December 2020 and the transition period has not been extended. The UK has to maintain the EU’s common external tariff on third countries.
There would be no tariffs or quotas for goods traded between the UK and EU, and no need for proof of origin. Northern Ireland would be part of the same customs territory as Great Britain, but unlike Great Britain would have to apply EU customs law as set out in the Union’s Customs Code. Fisheries are excluded from the customs territory, pending an agreement on fishing rights before the end of the transition.
Fisheries have been excluded as other EU members have been reluctant to concede tariff-free market access for UK fish without an agreement on rights to fish in UK waters once the UK has left the Common Fisheries Policy. This could prove difficult to negotiate".
The technical agreement is the first step in eliminating the uncertainties regarding the trade between the two parts after 29 March 2019, when Brexit will become effective. Still, IMTA representatives are worried about dark scenarios that lie ahead. "Until this agreement is secured at a political and legislative level our members still face uncertainty about what happens from March 29th, 2019 at 11 pm. Though we recognize that the UK government could take unilateral steps on tariff policy to avoid them, if no action is taken there is the risk that the UK defaults to WTO tariffs on imports which are as high as 60% in the case of beef imports. There is also great uncertainty about UK meat export approval to the EU in this scenario", informs the association.

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