It\u2019s hardly been out of the news since the vote to leave the EU was announced over 18 months ago. Now, the UK is just one year away from exiting the common market trading bloc that it has been a part of since 1973 (when the EU was the European Economic Community). How are the exit negotiations shaping up, and what are the likely consequences of Brexit, as we currently understand it?<\/p>\n
Yes, but with caveats. On March 19 this year Britain and the EU agreed the terms for an official \u2018transition period\u2019<\/a> which has been created to allow what has been termed an \u2018orderly withdrawal\u2019. Effectively this means that the UK will still have to play by the EU\u2019s rules until December 31 2020, but during this time can proceed with global trade negotiations that will come into force in 2021.<\/p>\n The transition period terms are relatively straightforward, however the continuing issue of the Irish border is a sticking point within them. In brief, they are:<\/p>\n Essentially a huge number of treaties with countries spanning the globe, the trading rules for which have been agreed with the EU as a trading bloc rather than individual countries such as the UK. The country hasn\u2019t been in this position since joining the (then) EEC back in 1973, so from the big trade deals with partners such as the USA, through to agreeing tariffs on the import of cereals from minor partners, the UK has to make new agreements.<\/p>\n According to a report in the Financial Times<\/a> in May 2017, the UK has to renegotiate at least <\/em>759 treaties with approximately 168 countries thanks to Brexit. The FT article states that at worst many of the deals will simple replace \u201cEU\u201d with \u201cUK\u201d in the treaty, and at best the UK might get a better deal, but there are no guarantees. In some cases there are treaties that the UK will simply not bother trying to replace where a workaround is available. There is a lot of is administration but there isn\u2019t a lot of is time.<\/p>\n Kent Business School\u2019s Dr Carmen Stoian<\/a>;<\/p>\n “L<\/em>eaving the EU inevitably means forgoing some of these gains (of being part of the EU) as a result of the\u00a0increased barriers to trade and investment\u00a0that are likely to occur in all possible scenarios. Whilst free trade with non-EU partners is\u00a0likely to generate some economic growth, the UK\u2019s geographical location, historical, economic, political and business links with the continent\u00a0makes the EU the UK\u2019s most logical and natural business partner. So no wonder that impact studies are finding that long-term economic growth will be affected negatively by Brexit,\u00a0in all scenarios<\/a>.\u201d<\/em><\/p>\n As well as trade and tariffs, the UK will repeal all EU laws currently governing the country and, over a period of time, have to replace these with home-grown laws. According to the government\u2019s own white paper there is \u201cno single figure\u201d for the number of EU laws that are enacted in the UK, however the BBC cites 12,000 EU regulations, 7,900 statutory instruments passed by Parliament to implement EU legislation and 186 acts of Parliament that incorporate EU influence. This is just the tip of the iceberg, and until the UK formally leaves the EU new laws still apply and will subsequently have to be unpicked and replaced.<\/p>\n In the run-up to the referendum, and ever since, there has been an ongoing and often savage row over the economic impact of Brexit on the UK economy. Who can forget the Leave camp\u2019s big red bus that seemed to promise \u00a3350m per week, saved from the EU, to be pumped into the NHS?<\/p>\n Of course the actual outcome is near-impossible to predict with any degree of accuracy as quite simply, we don\u2019t know what will happen. EU countries are unlikely to want to make it easy for the UK to create deals within the common market than already exist, so realistically Great Britain has to look further afield and hope that it can retain and even increase tariff-free trade agreements. Moreover, EU countries are scrambling to attract tech, manufacturing and financial companies away from their traditional hubs in the UK through a host of financial incentives.<\/p>\n In recent weeks Anglo-Dutch giant, Unilever announced that it was going to move its headquarters<\/a> from London to Rotterdam. Dr Carmen Stoian wrote;<\/p>\n \u201c\u2026<\/em>the move is driven by\u00a0both push and pull factors, amongst which\u00a0political factors cannot be neglected. Since the British vote in the EU referendum in June 2016, governments, local authorities and business networks in various European countries\u00a0have worked hard to improve the investment climate in their markets\u00a0in order to attract multinationals headquartered in London that\u00a0may be wary of Brexit.\u201d\u00a0<\/em><\/p>\n Aside from the \u00a340bn (if not more) \u2018divorce bill\u2019, the UK will no longer receive EU grants and rebates, however as one of the ten countries that pays in more than it receives, we will be better off. For example, the UK received \u00a34.6bn in 2014\/15 from the EU, but contributed \u00a38.8bn in the same period. But for UK businesses, the majority of which were pro-EU, the uncertainty of the future has caused many to be pessimistic about their own and wider economic growth. When the UK leaves it will become a member of the World Trade Organisation of its own right which should protect the country from unfair or discriminatory tariffs, but the ultimate shape of the trade agreements may take years to come out in the wash.<\/p>\n International Trade Secretary, Liam Fox, is optimistic;<\/p>\n \u201cWe have a \u00a317bn surplus in services with the European Union, the European Union has a \u00a3102bn surplus with the UK, so it would be very damaging to businesses in Europe not to come to a deal. Therefore I think that the economic well-being of the people of Europe, of the businesses of Europe will ultimately take precedence in these negotiations over the politics of every closer union.\u201d<\/em><\/p>\n The relationship between the UK and EU will undoubtedly continue to be very strong; after all, the EU is Britain\u2019s biggest trading partner. With negotiations very much ongoing there will be a lot more clarity as to the situation in the coming 12 months.<\/p>\n Both sides are fighting hard to protect their own interests whilst balancing the rights of the people who will be most affected and the businesses that rely on a \u2018good\u2019 deal being struck. It\u2019s of no interest to either side to be too hard on the other, but equally in any break-up there is going to be a level of animosity and neither wants to lose out.<\/p>\n The big issues surrounding the customs union, Irish border, fishing policy and migration will continue to be debated – hard and difficult decisions need to be made and agreed over the next year. What is likely, however, is that come March 19 2019 there will still be a very long way to go until the picture for the UK-EU relationship is clear.<\/p>\n For more information on the internationally-focused undergraduate and postgraduate programmes Kent Business School can offer, have a look at our website.<\/a>\u00a0<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"\n
What has to be negotiated on a global level?<\/h2>\n
The economy<\/h2>\n
Moving forward<\/h2>\n