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Brexit: What happens next?

by Tester

“Get Brexit done” was the mantra that won Boris Johnson the strongest mandate a British Prime Minister has held in contemporary electoral history. But as the UK officially exited the European Union on the 31st January, leaver celebrations and big ben theatrics were overshadowed by a rather ominous cloud hanging over the post-Brexit horizon: what happens next? This is to say, what does Brexit actually mean for the general British public? How will YOU be affected? And how should you prepare for Brexit? The answer, contrary to Johnson’s pledge of getting Brexit “done”, still remains undecided. In fact, for the time-being, Brexit will have no tangible, immediate impact on any of the above mentioned or other issues. That’s because the UK and EU will not disengage immediately. Instead, the UK will continue to follow EU rules as it enters into a transition period in which the two sides will try to hash out the future relationship.

So, is Brexit delayed until 2021?

Yes and no. To put it very simply, the divorce has already happened, but most of the terms still need to be determined. What happened on the 31st January was that the UK, for all constitutional and legal purposes, ceased to be a member of the European Union. As a British citizen, you are no longer also a European citizen. There will be no more European elections in the UK and Britain will play no further part EU law making. What follows now is a year-long transition period where the post-Brexit arrangements between the UK and EU will be decided in a trade deal between the countries, as well as several other agreements.

Hang on a minute, what about the Brexit agreement?

Before we discuss what a potential trade deal may look like, it is prudent to touch upon the much-touted withdrawal agreement that most people did seem mistake for the actual trade deal that would determine our future. The withdrawal agreement simply set out how the divorce would take place. For example, it provided that the act taking the UK into the EU will be repealed, only to be reinstated for a transition period. It proposed a plan to ensure frictionless trade on the border between Northern Ireland and Ireland. The agreement also covered issues such as the UK’s £39 billion divorce bill it would pay over the next few years and the rights of EU citizens living in the UK.

The transition period and what actually happens next:

The Brexit deal includes a two year transition period, which could go on until 2023, but is currently due to end on 31st January 2020. The government was so serious about proving its commitment to getting Brexit done that it passed a law banning the extension of the period beyond 2020. During this period, the UK will go to talks with the EU on their future relationship. Not only that, it is now also free to begin trade negotiations with other big players such as the USA and India, which was billed as one of Brexit’s major benefits.

Trade

What will be the economic consequences of Brexit? How far will be the fears that defined the Brexit debate, from food and medicine shortages, gridlocks and economic recession actually materialise?

As long as the UK was part of the EU customs union and single market, trade with the EU occurred without any restrictions and tariffs. Now that the UK is leaving the EU, new trade terms need to be agreed. Both sides have expressed a desire to keep trade barriers low with no tariffs and no quotas. However, there might be a few snags in the way of achieving this.

Firstly, the EU wants to maintain what it refers to as a “level playing field”. Essentially, the UK, which is no-longer bound by EU legislation, should not misuse this freedom to ease its regulatory framework and gain an unfair advantage over the EU in attracting external investment. Instead, it should align itself with EU law post-Brexit as well as allow oversight from EU courts. For Boris Johnson however, this would be tantamount to an abhorrent “soft” Brexit. According to him, Brexit is about using UK’s “newly recaptured power” to head “out into the world”. This power entails the autonomy to decide its own competition policy, subsidies, social and employment protection, the environment and a whole range of issues affecting trade and investment. Without the ability to make its own laws to reap maximum benefit of its independence, Brexit would remain Brexit in name only.

If a deal is struck, expect a less chaotic Brexit, despite the UK economy still expected to stumble. If however the UK and EU find themselves deadlocked at the end of the transition period, whether it be 31st January 2020 or 2023, the UK would crash out of the EU in a “WTO” Brexit. This would be what’s referred to as “no deal brexit”. WTO terms mean high tariffs and trade restrictions that would impact the UK 4 times worse than the EU with a 9.8 percent decrease in exports.

Travel

As of now (in the Transition period), UK citizens can still exercise their freedom to travel between EU member states as they wish. Even post 2021, UK residents be provided with considerable convenience. In spite of their ‘third-country national’ status, they will not need to apply for a Schengen Visa like many other nationalities. The European Council has agreed to grant UK residents sufficient freedom with regards to coming to the Schengen area for a short stay (90 days in any 180 days) without a visa. To read more about travelling to the EU after Brexit, click here.

Employment

Most EU-derived employment laws will be absorbed into domestic UK law through the withdrawal agreement. Although the UK will thereafter be free to amend its laws separately from the EU, drastic changes in employment rights are unlikely to be politically viable.

Conclusion

The UK’s admission into the EU in 1973 altered the course of British politics, constitution and society for the next four decades. Whilst its exit has long been poised to do the same, the manner and extent of this change remain uncertain and will only be determined in the coming twelve months. Meanwhile, the public must brace itself for further drama in a saga that is far from over yet.

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