When Britain took the irrevocable step to leave the European Union by triggering Article 50 of the Lisbon Treaty following the unexpected result of the UK referendum, it was envisaged by all parties that within the two years negotiation period, (which was further extended) and the one year transition period, a free trade deal would be struck. With hardly more than one month to go no deal has yet been struck. Face to face talks have resumed with both sides implying that a deal can be struck.
Should the last-ditch Brexit negotiators fail to deliver a satisfactory trade deal between Britain and the European Member States, the World Trade Organisation (WTO) rules come into effect, which would mean tariffs on exports to the EU, and customs checks at the borders (and vice versa). Britain will be free to find new markets and the EU and Britain will have to learn a new way of trading or face the two-way street of loss.
Trade between Britain and the European Union, prior to the start of the path to Brexit, amounted to approximately €1196 billion, largely from the import and export of goods; neither the UK nor the EU wish to let that level of trade slip away.
Nick McEwen, an associate in the corporate and commercial team commented "in the absence of clear direction from the government as to a number of trade issues we believe that business owners will have to find innovative ways of continuing to trade. Giambrone has advised a number of business with measures to mitigate the effects of Brexit by ensuring that they have a foothold either in Britain or the EU by way of creating subsidiaries, new business structures or by strategically relocating their headquarters in the country they wish to do business in order to limit the problems that Brexit brings for cross-border trade." He further commented "other options to enable the continuance of cross-border trade could be strategic mergers. Working with our offices in Europe means we can provide solutions to legal issues that may arise in foreign jurisdictions without undue delay."
The government would be well advised to focus on ways to provide assistance to organisations wrestling with the last-minute challenges of Brexit rather than unnecessarily reminding them that Brexit is round the corner. Business organisations across the UK have criticised the raft of letters sent out by the business secretary, Alok Sharma, instructing business owners to "...follow the post-Brexit rules..." as "...your business could face delays, disruption or administrative costs if you do not comply with new customs procedures from 1 January 2021..." when it is obvious that there a considerable lack of clarity surrounding those rules. The Federation of Small Businesses (FSB) chairman, Mike Cherry, pointed out "while we appreciate the government is rightly encouraging firms to prepare, we urgently need the detail that will enable us to prepare comprehensively, not general calls to get ready." With the head of international at the Food and Drink Federation, Dominic Goudie commenting "it is beyond belief that the government is telling food and drink manufacturers to prepare for moving goods to Northern Ireland when they have still not set out what the rules will be, or precisely what businesses need to prepare for."
Giambrone's corporate and commercial teams both in the UK and across Europe have the expertise and agility to advise and guide you through the issues that currently confront organisations and can help you navigate through the new rules when we eventually have clarity from the government.
For information about how our corporate and commercial lawyers can assist you with preparing for cross-border trade after Brexit please click here
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