The United Kingdom’s departure from the European Union has been a topic of debate ever since the European Union membership referendum took place in June 2016. The results of the referendum showed that voters took side on the “Leave” campaign by 52 percent, meaning that the United Kingdom would, sooner or later, be leaving the EU. However, this was only the very beginning of a long journey that after nearly four years, is still not at its final destination.
Dates for Brexit had been set and rescheduled over and over again. When Prime Minister Theresa May resigned, Boris Johnson took over her position, and soon the Parliament had been unlawfully prorogued, but Brexit was still not in place until the 31st of January 2020.
This date, however, marks a significant moment not only in the history of the UK but also in the history of the European Union. It can be seen as a turning point in the “life” of the Union.
Since the establishment of the European Economic Community in 1957, which can be seen as the EU’s predecessor, the number of Member States within the Union has been growing year by year. The EU seemed to pursue the way towards an ever-closer union as set out in its founding treaties. However, the departure of one of the Union’s greatest economical markets will undoubtedly leave a mark on the Union as it will also have huge impacts on the United Kingdom.
Brexit has only taken place formally so far, which means that the UK has entered a transition period since January.
What does this exactly mean?
The transition period, first and foremost, opens room for negotiation processes concerning travel, freedom of movement and free trade deals between the UK and the European states. Out of these, a potential free trade deal has the greatest significance for both the UK and the EU. During the transition period, the UK remains part of the EU’s customs union and single market, however, it is no longer politically represented at the European Parliament and European Commission. This means that the UK is deprived of its voting rights and political contribution on an EU level. And once this 11-month long transition period reaches its end, the UK will also have to leave the customs union and the single market.
The free trade deal is a pressing issue and a primary requirement if the UK wishes to continue trading with the EU without quotas, tariffs and other barriers. The UK and EU already came up with an outline for the potential settlements between them, called The Political Declaration setting out the framework for the future relationship between the European Union and the United Kingdom. The draft emphasizes that the interests of both parties (the UK and the EU) have to be taken into consideration in a balanced manner. This implies that the indivisibility of the four freedoms that form the basis of the EU’s single market should be respected. These four freedoms are as follows – free movement of goods, capital, services, and people. One of the greatest motivations for Brexit that could be achieved, and which is also highlighted in the “Framework for the future relationship”, is to end the free movement of people between the Union and the UK. The aim is to reduce immigration to the UK. This is where it is already possible to detect a clash between the two parties’ interests as the previously enumerated four freedoms include the free movement of people. Bearing in mind that countries not part of the EU (although part of the European Economic Area, which the UK is also leaving), like Norway, still allow for the free movement of people, the aim to end such freedom is particularly a tough one. Here comes the question, whether the EU would allow the UK to cherry-pick from these four freedoms. On the one hand, as a non-EU member, the UK will have the power to stretch the indivisibility of the four freedoms and only aim for a free trade deal.
However, the EU’s reaction to treating the four freedoms as a list that one can pick and choose from, might not be perceived as the most ideal scenario.
BREXIT IN TIMES OF COVID-19
Can the negotiations proceed while a corona epidemic is threatening the world?
The transition period allowing for negotiations ends on 31 December 2020. However, it could be extended by the British Prime Minister Boris Johnson with the EU's corresponding agreement. Such a possibility to extend for another year or two is open until 1 July 2020. Taking into consideration the number of agreements that have to be made within this 11-month long period, Ursula von der Leyen, the President of the European Commission has already tried to persuade Johnson in January to consider the extension. As the corona crisis is happening globally, it is now, even more, pressing to make this decision.
However, Johnson negates the need for the extension. One of the reasons behind this might be the billions of pounds the UK will be required to pay if it remains part of the customs union and the single market for longer than the length of the envisioned transition period, namely the end of December. Based on the current circumstances, it is rather unlikely that the negotiations could take place. Moreover, the negotiations are complex concerning a wide range of other issues besides trade. Without a request for extension and without a deal at the end of the year, the UK would have to rely on WTO (World Trade Organisation) terms until a negotiated trade agreement emerges with the EU. That would impose a number of tariffs on UK goods and would hamper the British economy to a great extent. This would come as an addition to the economic setback resulting from the pandemic. The solution might be a shorter extension (three or six months) of the transition period, which would give some more time for discussions in the future that cannot happen and are not a priority in times of the corona crisis. When looking further into the future, however, a more significant question may arise. This is whether Brexit could act as a catalyst for further disintegration of the European Union. Currently, there is no clear answer to this question, however, it is already possible to detect discrepancies and less cooperation between member states than one would expect in times of a crisis.