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COVID 19: Impact on BREXIT

24.04.2020 Corporate

Mona Patel

Mona Patel Partner

The impact of the COVID-19 pandemic has clearly influenced the Brexit timetable.

The possibility of concluding an agreed framework to govern the future relationship between the UK and EU and the necessary systems to implement the framework before 31 December 2020 looked ambitious even before the coronavirus crisis struck. Attempting to meet the deadline when a public health emergency exists appears even more challenging.

How is COVID-19 impacting the UK’s position during the transition period?

The UK left the European Union at 11pm on Friday, 31 January after more than 40 years of membership.  The UK is currently in the ‘transition period’ (also coined the Brexit ‘implementation period’) until 31 December 2020, during which time (assuming there is no extension) the UK and the EU will seek to negotiate their future relationship.  During the transition period, EU rules and regulations continue to apply to the UK as though it remains an EU member.  However, the UK will no longer have the right to contribute to EU governance or the determination of decisions. Any new EU laws that come into force during the Brexit transition period will also apply in the UK (despite the UK having no part in negotiating them).  This lack of input during the transition period was not considered an issue because it was felt that most key and impactful EU law was established when the UK still had an input.  However, the impact of COVID-19 will force the EU to make swift decisions on new unexpected policies and rules during the Brexit transition period, which the UK will have to abide by but will have no say on.

Has the Brexit negotiation timetable been impacted by COVID-19?

Yes.  A combination of self-isolation of key negotiators (on both sides) and lockdown has delayed negotiations. Whilst the first round of negotiations took place in March (2 to 5 March), and draft legal texts (setting out how the agreement governing the future UK-EU relationship may look) were exchanged on the 18 March, the negotiations scheduled for 18-20 March and 6-8 April did not take place. 

Can Brexit negotiations be conducted without meetings taking place in person?

The inability to conduct meetings in person has naturally impacted negotiations, however, it will not stop them.

Like all of us, the UK Government has been grappling with the appropriate e-communication methods to continue Brexit discussions.  Undoubtedly, this has been challenging with the large number of participants required to attend the discussions and the technology and security issues to consider. 

However, on the 16 April the parties agreed that negotiations could continue by video conferencing.

Where are we now with Brexit negotiations?

On the 16 April, the UK Government agreed dates for the next three rounds of Brexit talks, beginning on 20 April with the other two rounds scheduled for 11 May and 1 June. Each negotiating session is expected to last a week. 

Despite the delay to negotiations the UK Government remains determined to stick to the 31 December 2020 deadline.  The UK Government position was reaffirmed on 16 April 2020 in a tweet by its chief Brexit negotiator David Frost, who wrote:

“As we prepare for the next Rounds of negotiations, I want to reiterate the Government's position on the transition period created following our withdrawal from the EU. Transition ends on 31 December this year.  We will not ask to extend it. If the EU asks we will say no”.

Does this mean an extension to the transition period is off the cards?

The Freight Transport Association, the Road Haulage Association and the British International Freight Association have all stressed the importance of an extension to the transition period especially given the particular strain felt by them as a result of the coronavirus outbreak.  However, despite requests from the opposition party and pressure from the logistics industry to consider an extension, at the moment, the UK Government is standing firm on its decision not to extend the transition period. 

The reality is that if no tangible progress is made by June the UK Government will have no choice but to rethink its position.  The deadline for applying for an extension is 30 June 2020, although new legislation must be passed to allow the UK Government to agree to an extension.  This means if an extension is to be considered time will be tight to get in before the deadline.

For most businesses, their attention for the time being will be on dealing with the implications of COVID-19 on their business.  However, many fear that there is a real possibility of a 'No Trade Deal Brexit' if the UK Government does not agree to request an extension.  With supply chains and work forces already having faced huge pressure from the coronavirus the last thing businesses want is further disruption which many feel a hastily negotiated Brexit may bring.

Article authors:

Mona Patel