RPA’s BREXIT Desk

/RPA’s BREXIT Desk
RPA’s BREXIT Desk 2017-04-21T09:46:57+00:00

State of Play

  • On 23 June 2016, the people of the United Kingdom voted in favour to leave the European Union.
  • Prime Minister David Cameron stepped down and was replaced by Theresa May, who conducted a significant reshuffle of the UK Government.
  • A new Government department dedicated to exiting the European Union was established, led by the new Secretary of State for Exiting the EU, MP David Davis. Will this department have significant influence on the pending talks to come?
  • UK-EU exit talks are not supposed to start prior to the invocation of Article 50 of the Treaty on the European Union, which lays down a set procedure for an existing EU Member State wishing to exit the EU. Will this be respected by the Member States?
  • UK Prime Minister, Theresa May, announced that she would begin the exit procedure by March 2017. However, will the recent legal decision by the High Court against the UK government for not consulting the Westminster Parliament have any influence? How will the Supreme Court rule on this topic? Will new legal cases, such as one concerning the EEA further stall the talks?
  • Both the EU and UK have set-up a BREXIT negotiating team. Will these two teams be waiting for the invocation of Article 50, or are substantial preparations underway?

Why is it important to you?

  • Pending on the type of Brexit, it is highly likely that goods, capital, services and labour will no longer flow freely between the EU and UK markets. We expect the UK to not remain within the internal market, nor be a member of the customs union. This will significantly impact any organisation in Europe that currently conducts trade between the UK and EU and vice-versa. For instance, will certain goods face high tariffs and duties? Will organisations need to relocate staff? How will the development of non-tariff barriers impact market entry?
  • Existing EU legislation, including jurisdiction of the European Court of Justice, will no longer automatically apply to the UK after Brexit and the repeal of the European Communities Act 1972. As a result, the body of EU law, known as the acquis communitaire, which contains thousands of regulations, directives, jurisprudence, guidelines, and standards will no longer have any legal affect. Only those laws transposed through statute and statutory instruments prior to Brexit will remain. What laws will, however, be repealed by the UK government? Will existing standards for goods alter significantly? Is there a danger for too much divergence for cross-border market players?
  • Existing trade deals between the EU and third countries, which the UK currently benefits via its EU membership, will no longer apply. Thus, the current situation must be reviewed by governments and trade organizations around the world. Brexit will also have an impact on duties and tariffs and all other barriers to trade. There are many pending questions, for instance, how will businesses that currently benefit from these EU-third country relations continue to do so post-Brexit? How can you influence pending negotiations at the WTO?

What is next?

  • Government officials in the EU and UK will prepare their dossiers for the start of the Brexit talks, likely to start in early 2017. For all the internal market Brexit talks, organisations will need to start preparing themselves with a critical Brexit impact assessment and solid advocacy strategy.
  • Third countries will also have to assess the impact on their trade relations with the EU and with the UK. Interested parties would include government and private organisations from the EU, UK and third countries. It is imperative that organisations make a critical Brexit impact assessment, keep abreast of the ongoing developments and prepare to advocate their interests when needed.
  • Is it possible to assess Brexit in three bullet points? Certainty not! Brexit will have a tremendous impact on not only trade and the economy on both sides, but also on security, defence, foreign affairs, etc.
  • A Brexit impact assessment for your organisation should make clear what the risks are, how to approach the upcoming talks, and what strategy your organisation should take to safeguard your interests.

Would you like to know how your business could be impacted? If so, please contact our Brexit desk at Brexit@ridenspa.com or call Oliver Hateley at +32 22137422.

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