UPDATE ON BREXIT

On 20 December, the British Parliament adopted 358 to 234 in favour of the Withdrawal Agreement Bill, which set the new deadline for the UK to leave the EU on 31 January 2020.

Assuming the European Parliament also gives the green light, the UK will formally leave the EU on 31 January with a withdrawal deal. Following the departure, the UK will enter a transition period until 31 December 2020. During this period, the UK’s trading relationship with the EU will remain the same while the two sides negotiate a free trade deal.

If a trade deal is ready in time, the UK’s new relationship with the EU can begin immediately after the transition. If not, the UK faces the prospect of having to trade with no agreement in force. This would mean checks and tariffs on UK goods travelling to the EU.

In the event of a UK exit from the EU without an agreement, different rates of customs duties will be levied on imports into the UK for goods from the EU and goods from the rest of the world. The provisional tariffs and quotas will be in force for 12 months, after which the government will, after consulting the economy, introduce a permanent customs regime.

The list of goods for which provisional tariffs and quotas will apply will be published on the UK Government site (available here). EU goods not covered by the list are subject to a customs duty of 0%. Under the provisional customs regime, 88% of all imports into the UK will be free of duty.

Some facts about Brexit:

  • 2016: Brexit referendum took place on 23 June 2016. It resulted in 51.9% of the votes cast being in favour of leaving the EU. Although the referendum was legally non-binding, the government of the time promised to implement the result
  • 2017: Prime Minister Theresa May triggered Article 50 – the formal process to leave – and kicked off negotiations.
  • 2019:
    • Brexit was originally due to happen on 29 March 2019.
    • The deadline was delayed twice after MPs rejected Ms May’s Brexit deal – eventually pushing the date to 31 October 2019 and resulting in Ms May’s resignation.
    • Boris Johnson replaced Ms May in July 2019 as PM.
    • Mr Johnson tried to put his revised deal to a vote in Parliament on 19 October 2019, however, the vote did not go ahead.
    • With Parliament in deadlock, Mr Johnson called an early general election, to which MPs agreed.
    • The election happened on 12 December, resulting in 365 seats (out of 650; 43,6%) for Conservatives.
    • On 20 December, the Parliament adopted 358 to 234 in favour of the Withdrawal Agreement Bill, which set the new deadline for 31 January 2020.
    • Assuming the European Parliament also gives the green light, the UK will formally leave the EU on 31 January with a withdrawal deal.
    • Following the departure, the UK will enter a transition period until 31 December 2020. During this period, the UK’s trading relationship with the EU will remain the same while the two sides negotiate a free trade deal.
    • If a trade deal is ready in time, the UK’s new relationship with the EU can begin immediately after the transition. If not, the UK faces the prospect of having to trade with no agreement in force. This would mean checks and tariffs on UK goods travelling to the EU.
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