Brexit is scheduled to occur on 29 March 2019. Brexit will have a significant impact on Ireland. In December 2017 the European Council adopted guidelines to move to the second phase of the negotiations between the EU and the United Kingdom regarding Brexit. Further progress has been made in negotiations up to March 2018 and it now appears that a further transitionary period will apply up until the end of 2020 during which the UK will remain subject to full EU regulation.
Despite the newly agreed transitionary period, a considerable amount of uncertainty exists as to the final outcome of Brexit. There are some possibilities however that can be discerned from the recent pronouncements from both parties to the negotiations.
The UK Government has outlined three redline outcomes,
- The UK leaving the single market;
- The UK leaving the custom union; and
- The ending of the jurisdiction of the European Court of Justice in UK law.
If it sticks to these points then it is clear that the UK will not be able to avail of a ‘Norway’ model with regard to the movement of goods and services between the UK and the EU, and therefore a bespoke free trade agreement will be required (or in the absence of such an agreement being reached, a fall back to World Trade Organisation rules). We expect that this could result in some or all of the following outcomes:
- possible raising of tariffs on goods exported from the EU to the UK and vice versa;
- customs border check requirements between the EU and UK (possibly technology aided);
- separate regulatory regimes applying in the UK and the EU in a number of areas (even if similar or equivalent standards are maintained).
- the end of financial services passporting rights between the UK and the EU;
- restrictions on the free movement of workers between the UK and the EU.
In an Irish context, a number of businesses could be impacted by Brexit, including:
- Irish businesses who export goods or services to the UK, or who operate businesses in the UK;
- UK businesses who operate businesses in Ireland or who are considering using Ireland as their EU base following Brexit; and
- Businesses from outside the EU and the UK who currently use the UK as their EU base and are considering establishing in Ireland.
All such businesses should start planning for Brexit now, if they have not already done so.
See our full Brexit Special Report here