At the time of writing (31st October) the EU has agreed a second extension (or “flex-tension”) to Brexit, delaying the event to 31st January 2020.
Brexit may occur sooner, if necessary procedures can be completed quickly, but that seems unlikely as the UK now prepares for a General Election in December. Businesses and government are may welcome additional time to digest the details of the revised Withdrawal Bill, but the prospect of a new Parliament and the nature of the “flex-tension” create continued uncertainty.
What is now proposed
For businesses, the key element of the New Withdrawal Deal is that the UK, including Northern Ireland, will exit the EU Customs Area on Brexit (the Old deal was that the UK would stay within the Customs Area).
Great Britain will also exit the EU Single Market, meaning that England, Scotland and Wales will no longer have to follow EU rules on product specification, environmental protection and so on.
Northern Ireland will remain inside the EU Single Market. From the viewpoint of goods regulation, a “border” will appear in the Irish Sea, which may mean that foods cannot pass without inspection to ensure compliance.
No duty will be paid on goods sent from Great Britain to Northern Ireland, unless deemed to be “at risk” of onward movement to the EU.
If goods arrive in Northern Ireland for onward movement to the EU, the UK will levy duties on behalf of the EU. Obviously, this depends heavily on effective enforcement and – probably – new technology.
This element has not yet been explored in detail. There is certainly potential for impact on grocery supply chains, especially those operating over borders.
Under the New Withdrawal Deal, there will be no “hard border” between Ireland and Northern Ireland. The Common Travel Area will remain in-place (this arrangement pre-dates the EU).
If passed in the current form, the New Withdrawal Deal would not mean business as usual for grocery businesses. In some ways, the New deal is less favourable to business than the Old. Issues may include:
- A new tariff regime on imports to the UK, from the EU and / or other countries
- New administrative requirements for businesses in Northern Ireland
- Regulatory divergence between the EU and Great Britain
The UK and the EU - where we are now
The UK and the EU - where is proposed
Proposed new border structure, pre trade deal
The House of Commons has approved the new Withdrawal Bill in principle, by 329 to 299. However, the Commons rejected government attempts to pass the new Bill quickly, by 322 to 308.
The Bill is now “on pause” as we head into a General Election. The outcome of an election will influence the next stage, so quite when and how (or even if) the UK will leave the EU is for now unclear.
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