While the risks of a no-deal Brexit on the 31 October 2019 have greatly diminished, a no-deal Brexit is still firmly on the table for that date or, perhaps more likely, a future date.
Our updated Brexit Legal Guide addresses in detail the legal position if the UK leaves the EU with or without a deal – looking at key sectors as well as key cross-cutting issues (from contracts, corporate law and data protection to state aid and tax). It also has a number of useful explainers such as the Withdrawal Agreement Q&A and the UK's new legal order post-Brexit: A new class of UK law.
This blog post provides a shorter overview of key areas covered by our Brexit Legal Guide, focused solely on the implications of a no-deal.
Section A (An abrupt end to the UK's participation in the EU) references at a high level the key component arrangements that the UK would be abruptly leaving in a no-deal.
Section B (Impact for Business) looks at what a no-deal Brexit means for business in a number of key areas (alphabetical order). In this blog post you can click on each area in turn to reveal the relevant information contained in this post.
For each area there is also a link to the relevant section of our Brexit Legal Guide which contains more detailed information.
Section A: Abrupt End To The UK's Participation in the EU
A no-deal Brexit would mark a break with 46 years of economic integration between the UK and the EU, with, amongst other things, an abrupt end to the UK's participation in the:
- EU's single market (with its 'four freedoms': free movement of goods, persons, services and capital);
- EU's customs union (which eliminates tariffs on goods traded between EU members and a common external tariff for goods entering the EU from outside);
- EU's Common Agricultural and Fisheries Policies;
- EU's Internal Energy Market; and
- European Atomic Energy Community.
A no-deal scenario would take the UK abruptly from having one of the deepest sets of trade ties in both goods and services with the other 27 EU Member States to being in the same position as most of the EU's third country trading partners with whom no special trade agreement has been negotiated. The benefits of membership of the EU include the free circulation of goods between members, without tariffs, customs formalities or other forms of border control.
Members also enjoy wide-ranging rights to sell services without discrimination, for example by establishing operations anywhere inside the single market. A shared regulatory framework facilitates trade, with rights protected by EU law and enforced by EU and national courts.
Conversely, a no-deal Brexit also implies the removal in relation to the UK of the corresponding obligations of single market membership, including regulatory harmonisation with the EU in many areas and acceptance of free movement into the UK of goods, services, labour and capital of EU and EEA businesses and nationals.
The UK would also be free to adopt import duties distinct from those of the EU's Common Customs Tariff, to develop its own international trade policy and to diverge from other EU regulatory frameworks.
It is also worth remembering that the UK also trades in goods with many countries around the world on terms agreed by the EU, which include in many cases provisions on harmonisation of standards in line with relevant single market rules. The UK Government has agreed continuity deals with some of these countries. Until the UK has agreed new trading terms with all relevant countries, tariffs and standards issues will hinder trade flows and may, in some cases, be sufficiently serious to block or greatly reduce trade.
The Future EU/UK trade relationship section of our Brexit Legal Guide has more background on what a 'no-deal' Brexit would mean for EU/UK trade and what 'trading on WTO terms' would mean in practice.
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.