Update on Brexit: - Where are we? - Potential impact? Dr Thomas Horsley Liverpool Law School Thomas.Horsley@liverpool.ac.uk @ThomasHorsleyEU

UK/EU Withdrawal Agreement Political Declaration on the Framework for the Future UK/EU Partnership Uncertainties / Challenges / Risks

UK/EU Withdrawal Agreement Finalised b/t UK and EU27 in November 2018. Deals with the ‘transitional period’ – meaning the gap between the UK’s exit from the EU (29 March 2019) and the conclusion of new permanent arrangements (31 December 2020 at the earliest). Pending approval by UK and EU parliaments – more on that under ‘uncertainties...’

Impact of WA (assuming it’s approved...)? UK effectively remains in the EU (including the single market), albeit on the basis of the new WA Treaty, not the current EU Treaties.   UK (+ UK business) bound by all existing (and new) EU laws UK continues to pay into the EU budget UK remains subject to the Court of Justice of the EU Business as usual - at least re. legal rights/obligations  But note, during transitional period: UK unable to implement trade deals with 3rd countries. UK loses INPUT / VOICE in EU decision-making.

WA: Right to Employ EU nationals   Free movement (incl. right to work) continues for both UK and EU nationals. Scope of rights essentially unchanged. Applies to EU nationals arriving prior to the end of the transitional period (31 December 2020). Long-term stability guaranteed to EU nationals (and their family members) engaged in employment in the UK before the end of the transitional period. Note: Employers remain legally required to check employees’ ‘right to work’ status

WA: Right to Employ EU nationals   EU citizens’ free movement rights (incl. right to work) not automatic post-Brexit. EU nationals must apply and obtain either ‘settled’ or ‘pre-settled’ status prior to 30 June 2021 to secure rights after end of transitional period Settled status requires proof of 5 years continuous lawful residence in UK; Pre-settled status open to those with less than 5 years. Exemptions: Irish nationals and those already holding ‘indefinite leave’ to enter or remain in the UK need not apply.

Extending ‘Continuity’...   The WA permits extension of transitional period – ‘i.e. business as usual’ – beyond 31 December 2020 for a maximum of 2 years (e.g. to max 31 December 2022) Deadline for agreement b/t UK and EU on extension: 1 July 2020 Separately, WA sets out the ‘Irish Backstop’: Mechanism to avoid physical border between Northern Ireland and the Republic should the UK and the EU27 fail to agree new arrangements by the end of the transitional period. The backstop locks the UK (incl. Northern Ireland) into a ‘temporary’ customs arrangements with the EU until both sides reach agreement on a workable alternative.

Longer-Term: Political Declaration on the Framework for the Future UK/EU Partnership Agreed November 2018 26-page document to provide the ‘framework’ for the long-term UK / EU relationship post-transitional period(s) ‘the Parties agree to develop an ambitious, wide-ranging and balanced economic partnership. This partnership will be comprehensive, encompassing a free trade area as well as wider sectoral cooperation where it is in the mutual interest of both Parties. It will be underpinned by provisions ensuring a level playing field for open and fair competition’

Political Declaration: Specific Ambitions Aspires to closest possible integration in goods sector: no tariffs, quotes or charges and close ‘regulatory alignment.’ Aspires to close integration in key service sectors – including financial services based on market access and equivalence. Aspires to agreement on new ‘mobility arrangements’ b/t UK and EU27 in place of free movement – incl. reciprocal temporary visa-free travel for leisure / business (as minimum expectation).

Uncertainties / Challenges / Risks Immediate concern: What happens if the UK Parliament says no to the Withdrawal Agreement on Dec 11? Defeat in Parliament will create significant short-term uncertainty (forecast: further market instability). Outcome dependant on scale of defeat, but range from Gov. attempts to ‘try again’ (i.e. 2nd vote in Parliament on WA) to calls for a confidence vote and, ultimately, possible general election...

Uncertainties / Challenges / Risks EU27 clear that no scope for significant amendments to WA. Alternative options; e.g. (i) extending Art 50 negotiating period beyond 29 March 2019 deadline or (ii) seeking to withdraw the UK’s Art 50 notification to leave the EU (e.g. following possible second referendum). For business: unquestionably extremely challenging to operate against the backdrop of such political uncertainty – notwithstanding progress towards Brexit e.g. re. WA.