Brexit Withdrawal Agreement Main Points
During the transition period, the UK and the EU-27 will seek to conclude the agreement that will strengthen their trade relationship after the end of the transition period. Based on the revised political declaration, the objective of the EU and the UK appears to be to conclude a far-reaching but “classic” free trade agreement to cover goods, services and investment. The political declaration is thin, but trade in goods will be based on a free trade agreement that will at least ensure that there will be no tariffs or quotas, as well as some degree of regulatory alignment with the EU. However, as a result of the Free Trade Agreement, customs controls will be necessary for each party to prove that the goods originate in their respective customs territories in order to obtain duty-free treatment. This means that the UK and the EU-27 must now agree on detailed rules of origin. This is probably a complex and tedious process. At least companies need to think about the rules of origin they want to see for different products and start lobbying them as soon as the UK and the EU start negotiations on the new free trade agreement. It is encouraging to note that the scope of the future trade agreement appears to encompass services, including financial services and investment (although the outline is in turn not very detailed) and offers assurances that the agreement on the future relationship will offer a liberalisation of trade in services that will go far beyond the UK`s and the EU`s WTO commitments. The UK has opted for a system requiring EU citizens to apply for a new residency status called “Settled” or “pre-settled”. It is not yet clear whether each of the EU27 will exercise its discretion under the Withdrawal Agreement to require UK residents to apply for a new residence status. Following the first round of withdrawal negotiations, the UK and the EU adopted a common approach to the financial regime in the December 2017 Joint Report. The comparison defines the financial commitments covered, the methodology for calculating the UK share and the payment plan. The Withdrawal Agreement transforms the approach set out in this report into a legal text and provides for further negotiations on the UK`s contributions to the EU budget in the event of an extension of the transition period.
An extension would not affect financial management, which would continue as agreed. The above-mentioned elements of the Withdrawal Agreement aim to ensure the proper functioning of trade on the island of Ireland and to maintain North-South cooperation. There are ten appendices to the project….