After three and a half years, numerous demonstrations (for and against), a referendum and the succession of three prime ministers, Brexit has officially become a reality. The United Kingdom left the European Union on the night of January 31, 47 years after its entry into the EEC, the European Economic Community that laid the foundations for the subsequent formation of the current union.
An historic event, welcomed with predictable enthusiasm by Eurosceptics, which opens a period of bilateral negotiations and agreements necessary to define the new trade and legal relations between the United Kingdom and its former continental partners. A transition that Boris Johnson promises to close by the end of 2020 but on which analysts continue to make the most disparate predictions.
An 11-month transition
No momentous change is expected in the short term: people, goods and services will continue to move freely, at least until trade and movement agreements are redefined. Throughout 2020, London will continue to be part of the Single Market and the Customs Union, paying its contribution and subject to the decisions of the European Court of Justice, but without being able to say anything about the decisions that the other 27 countries will take. In other words, the UK will have to obey the rules, without having a say: a rule-taker and not a rule-maker role. The 73 MEPs from the UK, including the well-known Brexit Party leader, Nigel Farage, have left the European Parliament singing Auld Lang Syne, the Scottish farewell song. It was an undoubtedly spectacular and highly symbolic release, which immediately went viral on the web.
Similarly, from this moment on, London is excluded from the top of the EU Council, i.e. the regular meetings held by its members. If Prime Minister Boris Johnson wishes to attend future summits, he must receive a special invitation from the other EU leaders.
EU and UK: it is time to negotiate
By 31 December 2020, the United Kingdom and the European Union will have to agree on a series of extremely important points: from the possible duties to be applied on products and goods, to the relations between companies and institutions, passing through more general issues such as security, privacy and information sharing, patents, medicines, state aid, gas and electricity supplies, and the right to fish. This is a very long list, which makes many analysts doubt that the 11 months of transition will actually be enough to resolve each node. From a commercial point of view, it seems that the European Union, as also confirmed by the President of the EU Commission, Ursula Von Der Leyen, has no intention of applying any tariff on products or goods, as long as the United Kingdom respects environmental standards similar to those of the European Union and respects the rules on workers and state aid, avoiding giving too much freedom to its companies. The fear is that, in order to promote the economic recovery and avoid the possible repercussions of Brexit, London will offer its companies conditions that are impossible for EU companies to comply with, ignoring European competition rules. Another thorny issue concerns border control, especially as regards the border between the Republic of Ireland (belonging to the European Union) and Northern Ireland, part of the United Kingdom. This issue has already caused quite a few tensions in London, Dublin and Belfast. The preliminary agreement mentions a customs barrier in the Irish Sea, but everything is still to be defined.
Once these issues will be defined in an agreement, it will be the time to start deciding about people mobility: how will
European citizens who travel or want to live in the United Kingdom and vice versa be treated? Will Britain continue to involve its University students in the Erasmus project? Will cooperation in the cultural and security fields continue or be affected?
The no-deal ghost
The chances that the UK and the EU will be able to agree on all these issues by 31 December 2020 are very slim. What makes the picture worse is that the negotiations between London and Brussels will not actually start on 1 February, because it is necessary to wait for the Commission and the EU Council to approve the proposed negotiating mandate, which will be held on 3 March. Precisely for these reasons, many people are already today calling for the transition period to be extended beyond 31 December 2020. The problem is that one month ago the British Parliament, dominated after the elections by the Conservatives, at the proposal of Prime Minister Boris Johnson himself approved a law that commits Downing Street to complete the Brexit by 31 December “at any cost”.
Boris Johnson’s speech certainly does not suggest an easy transition: the British Prime Minister stressed in fact that the United Kingdom will not follow the rules of the European Union, with which it intends to sign, he said, a free trade agreement “Canadian-style”. According to the Prime Minister, the question will be whether the parties will reach a “zero tariff, zero quota” agreement comparable to that of Canada, or more similar to that of Australia, which simply reduces technical barriers, but is largely based on the terms of the World Trade Organization. Johnson, who explained to businessmen and ambassadors the position that London must discuss with Brussels to define its post-Brexit relations, added that he wishes to avoid the proliferation of European regulations. According to analysts, Johnson’s speech promises that the negotiations between London and Brussels will be difficult, especially with regard to European regulation and fisheries, two topics that some people think could disrupt a possible agreement. Beware, however, because there is also another possibility: Westminster could pass a new law which opposes to the one passed in December, allowing London to ask for an extension of the transition period. We shall see.