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Brexit Briefing: EU Transition Terms Agreed

Welcome to Freeths’ Brexit Bulletin

Regular updates from our immigration law specialists for UK businesses and their EU staff.

We hope you enjoyed our first ever Brexit Bulletin; a lot can happen in just two weeks. We hope our on-going Brexit bulletins will keep you up to date and will help you plan for Brexit to ensure you retain your valued workforce despite the uncertainties of negotiations in the run up to Brexit. Sign up here to stay informed with regular updates.

What Has Been Agreed for the Brexit Transition Period?

On 19 March 2018, significant progress was made towards reaching agreement over Brexit. The terms of the transition period were agreed between the key negotiators on each side, David Davis and Michel Barnier.

The key features of the agreement reached in Brussels are:

  • The transitional period will run to 31 December 2020.
  • EU citizens arriving in the UK during the transition period will enjoy the same rights and guarantees as those who arrive before Brexit.
  • To the dismay of the UK fishing industry, the UK will remain part of the Common Fisheries Policy until the end of 2020.
  • The UK will be able to enter into its own trade deals during the transition period.
  • Northern Ireland will stay in the single market in certain key sectors, until a solution for the Irish border conundrum can be agreed.

The First Draft of the EU’s Proposal

At 120 pages long, the European Union’s legal draft of its Brexit withdrawal agreement is hardly light reading. This historic first draft will form the backbone of the legally binding agreement which will govern the UK’s departure from the EU. Prepared by Michel Barnier’s European Commission Task Force 50, it is a solid step towards separation.

What Should we Look Out for?

  • The deal sets out some of the agreements made between the UK and EU in December 2017 relating to EU citizens rights. However, some rights issues have still not been agreed.
  • There are also disagreements on institutional rules (e.g. the EU having the power to sanction the UK unilaterally for breaching the agreement) and controversy regarding the Irish border.

So What is Making us a Not-So-United-Kingdom?

Currently, the border in Northern Ireland is the most controversial Brexit issue. After Boris Johnson hinted at a return of a hard border in Ireland, Theresa May warned that she would not do anything to threaten “the constitutional integrity of the UK”. She has categorically dismissed a hard border.

The EU proposal effectively grants a special status to Northern Ireland, and British politicians have alleged that the EU is trying to annex it. The DUP, who offer vital support to the Tory government, are also unsatisfied with the EU’s draft treaty – they think it breaches a previous Brussels agreement.

In Scotland, Holyrood has drafted their own EU Withdrawal Bill – a stop-gap solution if MSPs do not consent to the UK bill. Ministers disagree regarding powers exercised by Brussels, including issues like agriculture and fishing. Also, who should they go to post-Brexit – Westminster or Holyrood?

How do we Agree on the Right Deal for the UK?

Theresa May is still relatively positive about Brexit. She has stated that:

  • “The right deal for us will be the right deal for them too” and is confident of a deal being done.
  • The UK can “set an example to the world” in the way it negotiates its new relationship.
  • Both sides have to accept “hard facts” such as the UK still being affected by EU courts.

Negotiations are continuing. Some of the UK’s key trade proposals include:

  • A financial services passporting system.
  • Membership of EU medicines, chemical and aviation agencies.
  • Continued participation in EU science, education and cultural programmes.
  • Continuity of rail, maritime and aviation services and of hauler’s access to EU markets.

However, the CBI (Confederation of British Industry) does not share her optimism and say there are “big holes” in the UK’s plan. Action is needed to stop firms moving away; manufacturing business may lose out from being outside of the customs union.

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The content of this page is a summary of the law in force at the present time and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.

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