Negotiations between the UK and the EU to formalise the UK’s departure from the EU began in June and have continued on a monthly basis since then.
Although the Conservatives lost their overall majority in Westminster during the June General Election, the Conservative government is still aiming to leave both the EU Single Market and the Customs Union – a so-called "hard Brexit”. To that end, it has published a series of position papers over the summer, most of which argue for much of the status quo to continue, albeit with the UK outside these formal EU-based structures.
Both sides agreed to a phased approach to the negotiations. Phase 1, which has already started, would cover citizens’ rights, the issue of Northern Ireland,and the amount of money the UK will pay the EU when it leaves. If the EU judges that sufficient progress has been made on these issues by October, negotiations will move to phase 2, namely the future bilateral relationship, during which there would be initial discussions over a UK-EU trade deal. Note however that such a trade deal would only be finalised once the UK has formally left the EU.
It is also likely that there will be some form of transition deal once the UK leaves the EU in March 2019. This could, for example, involve the UK continuing to be a member of the Single Market and the Customs Union for a 2-year period from March 2019, although the details have yet to be finalised.
To compensate for leaving the EU, the UK is in the process of ensuring that all existing EU legislation in the UK is automatically switched to legislation which is rooted in UK law – thus, there should be no major legislative changes in the short term, although the UK will be able to make its own changes to this legislation once it has left the EU as it sees fit.
Leaving the Single Market and the Customs Union will change the way in which EU-UK cross-border transactions are dealt with. Furthermore, as mentioned in our previous newsletter, the UK’s departure from the European Single Market could for example result in an EU Regulation on type approval no longer applying to the UK. Potentially, this means that type-approval certificates issued by the UK’s national type approval authority VCA may no longer be valid in the EU.
UEIL is watching the negotiations closely as both parties around the table try to come to a solution that works for both the EU and the UK.