News & Publications
Brexit: What’s Next?
The United Kingdom formally left the European Union on January 31st, 2020. Although the UK has agreed to the terms for exiting the EU, there will still be a lot of discussion and months of negotiations to clarify the future relationship between both parties.
All of these would have to be worked out during the transition period by December 31st, 2020. During this period, the UK will remain a part of the EU’s trading arrangements – the single market and the customs union. Thus no tariffs, quotas, or checks will be introduced. The UK would have to sign an agreement with the EU by the end of the transition period to avoid the new tariffs and other trade barriers coming into force. As per the Department of International Trade, the trade with EU countries made up 49% of all UK trade in 2018. The other 11% covers countries with trade agreements with the EU and 40% makes the rest of the world.
The transition period will also allow the UK to start formal discussions with other countries. The possible agreements with these countries, as well as the agreement between the UK and the EU, would not take effect earlier than after the transition period.
There are three potential Brexit outcomes after December 31st, 2020:
- A UK-EU trade deal comes into force
- There is no trade deal between the UK and the EU (the trade terms of WHO would apply)
- The transit period is extended (this is not likely to happen as the British PM Boris Johnson would have to request this extension and the EU would have to agree by July 1st 2020)
Either way, now that the Brexit has happened, many more months of negotiations lie ahead.
Contributor: Petr Kokaisl
About Allyn International
Allyn International is dedicated to providing high quality, customer centric services and solutions for the global marketplace. Allyn's core products include transportation management, logistics sourcing, freight forwarding, supply chain consulting, tax management and global trade compliance. Allyn clients range from small local businesses to Fortune 500 firms. Allyn conducts business in more than 20 languages and has extensive experience in both developed and emerging markets. Highly trained experts are positioned throughout North and South America, Europe and Asia. Allyn’s regional headquarters are strategically located in Fort Myers, Florida, U.S.A., Shanghai, P.R. China, Prague, Czech Republic, and Dubai, U.A.E. For more information, visit www.allynintl.com.