Brexit Briefing - May 2018

   


Jane Lambert

Although there has been a lot of interest in the UK in the cabinet debate over the relative merits and demerits of maximum facilitation and the customs partnership and in the Lords' amendments to the European Unions (Withdrawal) Bill, there has not made much progress in the negotiations for a withdrawal agreement or a future partnership with the EU since April's Brexit Briefing. The stumbling blocks are, as they have always been, the border between Northern Ireland and the Irish Republic and the governance of any agreement that may be concluded between the UK and the remaining member states.

At the beginning of the month Ed Balls and Peter Sands of the Mossavar-Rahmani Center for Business and Government at Harvard Kennedy School published On the Rebound:Prospects for a US-UK Free Trade Agreement which concluded that a free trade agreement with the USA would be difficult to negotiate and probably not worth doing even if negotiations were successful (see Jane Lambert What Sort of Trade Deal (if any) could the UK negotiate with the USA? 8 June 2018). The imposition of tariffs on imported steel and aluminium and the recriminations at the G7 meeting do not offer much reason for optimism.

It is stressed that nothing is agreed until everything is agreed.  If an agreement over the stumbling blocks cannot be reached there will be no transition or implementation period.   Without a withdrawal agreement, he UK will be in no more advantageous relationship with its former partners than any other third country and in a rather less advantageous position than some.  There have already been warnings over the consequences of dropping out without an agreement such as shortages of food and medicines (see  Civil Servants Warn of Food, Fuel, Medicine Shortages Without Brexit Trade Deal 3 June 2018 Bloomberg) and the exclusion of British products  under preferential rules of origin (see Notice to Stakeholders Preferential Rules of Origin  6 June 2018).

If there is to be an agreement with the EU it has to be reached by the Autumn otherwise there will be insufficient time for the parliaments of the member states and the European Parliament to consider it. It is by no means certain that that deadline will be met. While I continue to hope for the best it is increasingly important for clients and other readers to prepare for the worst.

Should amplification or clarification of this article be required, call me on 020 7404 5252 during office hours or send me a message through my contact form.