Brexit All you Need to Know about the UK Leaving the EU 🍃📌 Brexit: What happens now?
The UK left the EU on 31 January 2020 and is now in an 11-month transition period.
During this period the UK effectively remains in the EU's customs union and single market and continues to obey EU rules.
However, it is no longer part of the political institutions. So, for example, there are no longer any British MEPs in the European Parliament.
📍 MP's back Boris Johnson's plan
📍 What is Boris Johnson's deal with the EU?
Future trade deal
Negotiations on a trade deal with the EU have been proceeding for several months. The UK wants as much access as possible for its goods and services to the EU.
But the government has made clear that the UK must leave the customs union and single market and end the overall jurisdiction of the European Court of Justice.
Both sides say there a still significant areas of disagreement - for example, on EU proposals for a so-called "level playing field", which would see the UK and EU maintain similar minimum standards on things like workers' rights and environmental protection.
📌 Brexit: What is a level playing field?
The deadline for the two sides to agree an extension to the transition period has now passed.
If no trade deal has been agreed and ratified by the end of the year, then the UK faces the prospect of tariffs on exports to the EU.
The prime minister has argued that as the UK is completely aligned to EU rules, the negotiation should be straightforward. But critics have pointed out that the UK wishes to have the freedom to diverge from EU rules so it can do deals with other countries - and that makes negotiations more difficult.
It's not just a trade deal that needs to be sorted out. The UK must agree how it is going to co-operate with the EU on security and law enforcement. The UK is set to leave the European Arrest Warrant scheme and will have to agree a replacement. It must also agree deals in a number of other areas where co-operation is needed.
It's also important to recognize that major changes will take effect on 1 January 2021 whether or not a trade deal is agreed. Free movement of people will end and businesses trading with the EU will have to follow new rules.
📌 What are the big issues at stake here?
Top of the list is a trade deal to ensure the tariff and quota-free flow of goods between the EU and UK. But the EU will only agree to zero tariffs and zero quotas if the UK pledges zero dumping – that is, not lowering social and environmental standards to outcompete the EU.
Negotiators will almost certainly clash over the EU’s refusal to bring services into the trade deal, leaving the City of London reliant on a patchwork of market access agreements that can be withdrawn at any moment.
Another early fight will be over fish, as the EU seeks to link goods trade to maintaining the status quo on access to British waters, a demand seen as outrageous in London.
The non-trade topics sound easier, but are full of political landmines. For instance, agreeing a replacement for the European arrest warrant will require Germany to change its constitution. The UK will struggle to achieve the historic first of securing outside access to some EU crime-fighting databases.
📌 What will happen to the economy?
It depends who you ask. In the short term, much of the risk seems to have been priced in, at least on currency markets, where sterling still languishes compared to where it was in June 2016. The stock market is well ahead.
📍 Sterling is still down on its pre-Brexit vote position
📍 Shares have rallied recently, partly fueled by greater Brexit certainty
📍 Investment in UK business has fallen behind other G7 countries
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