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Brexit in a page - what do I need to know? | 10 July 2020

Brexit expert Jacqui Bickerton summarises all you need to know about Brexit.

 Weekly reflection

The heat is increasing during the trade negotiations. Here is a summary of this week’s progress.

  • Boris Johnson has issued a warning to the EU this week, stating that negotiations will not be permitted to rumble on into the autumn and the UK are prepared to walk away on Australian terms. This means that the UK government are content to leave the transition period without a trade deal. Responding, Mrs. Merkel has told the EU Parliament that they should prepare for a no trade deal situation with the UK, specifically stating “I will continue to push for a good solution, but we should also prepare for a possible no deal scenario”.
  • As from July 2021 the UK will operate full border checks on products arriving into the UK from the EU. However, Michel Barnier has confirmed that this time frame will not be reciprocated by the EU. The EU have confirmed that they are ready for the UK to leave the Customs Union and Single Market on 1 January 2021 and all UK products entering the EU thereafter will be subject to border checks, with or without a trade deal. Businesses ought to be preparing for this and, in addition, recruitment of customs agents to deal with the tariffs which will be applied to goods if trading takes place on WTO terms.
  • Meanwhile, businesses’ concerns about the UK leaving the EU without a trade deal are mounting, with over 100 UK company chiefs and business groups writing to Boris Johnson warning that it would be hugely damaging to the economy. Pressure is mounting on businesses to prepare for the end of the transition period during a time when the uncertainty about what to prepare for continues. Businesses are reporting a lack of time and capacity to prepare for big changes in the trading rules, particularly when they are attempting to stabilise their businesses post-COVID 19. The letter to Boris Johnson warns that leaving without a trade deal will see a rise in unemployment in the UK and lower living standards.
  • This week has seen a suggestion of a “U-turn” by Brussels in relation to the UK financial services companies having access to the EU markets following the end of the transition period. Following discussions between Michel Barnier and David Frost, it has been revealed that the EU may well be ready to unilaterally grant EU market access to some UK financial companies as part of the overall deal. Further, there may well be some leniency from the EU surrounding the European Court of Justice’s roll in the future, with Michel Barnier stating “While the Court was the only body that could rule on matters of European law, it should be possible to address the government’s concerns about its jurisdiction in the UK”.
  • Finally, the House of Commons European scrutiny committee has warned this week that the UK are risking exclusion from the EU’s coronavirus vaccine programme. The issue has arisen following the UK government’s refusal to pay an increased contribution to the EU budget for 2020, arguing that the increase in the EU budget occurred after the UK had left the EU and, as such, the UK are not obliged to pay. A UK government spokesperson said “Work is ongoing to determine whether and how the UK participates in the EU Vaccines Strategy”.

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Key dates

6 July 2020
Face to face trade deal talks continue with Michel Barnier in London

18 July 2020
EU leaders meet to discuss 750 Billion Euro recovery fund

26 November 2020
End date for the trade deal to be finalised

31 December 2020
End of the transition period

30 June 2021
End of time for applying under the settled status scheme

To discuss any concerns about how Brexit may impact your business, please contact Jacqui Bickerton, Principal Associate or visit our Brexit Hub to find out more. 

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