Brodies explains what happens next with Brexit

Christine O'Neill
Christine O'Neill
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The Prime Minister may or may not have been correct to say that the General Election result rendered Brexit the “irrefutable, irresistible, unarguable decision of the British people”, writes Christine O’Neill of Brodies LLP.

What does seem unarguable, however, is that the new Government will now be in a position to achieve the Westminster Parliament’s approval of the revised agreement that was negotiated with the European Union in late October. If it does so, the UK will leave the EU on 31 January 2020 with the agreement in place.

A negotiated departure under this agreement would avoid a ‘no deal Brexit’, with the UK and the EU entering into a transitional or ‘implementation’ period. That transition was intended, under Prime Minister May’s original deal, to run from March 2019 to December 2020, during which period the UK formally leaves the Union but for many purposes continues to be treated by the EU ‘as if’ it was a member state. In particular, in an orderly transition there would be much greater certainty about the continued application in Britain of laws and regulations that come from Europe because the UK will continue to abide by those rules. The transition period is also to be used to give the UK and the EU time to negotiate a future relationship, including a trade agreement.

Under the revised Brexit agreement the transition phase is still due to end in December 2020 – cutting in half the time originally allowed for the negotiation of the future relationship. It remains to be seen whether the new Government will aim to extend that deadline: the Conservative Party in its Manifesto committed not to do so, but a change of heart might be politically palatable so long as the formal step of ending EU membership is achieved in January. Such an extension needs to be agreed with the EU by July of 2020 and, as matters stand, could be for only one or two years.

However long the transition period, it will involve significant further work by both sides to conclude a new agreement, with one critical factor being how the UK balances making concrete commitments to the EU with preserving flexibility to negotiate other (potentially conflicting) trade agreements with third countries such as the USA.

In the meantime, while a negotiated exit will avoid the ‘cliff edge’ of a no-deal Brexit in January, it will be important to understand some of the finer detail of the withdrawal agreement itself – particularly the impact on rights of residence and work of EU and UK nationals who move in and out of one another’s territory during the transition.

Christine O’Neill is chairman of Brodies LLP. Find out more at www.brodies.com/brexit