Brexit Institute News

New Year, But the Brexit Story is Not Over

Federico Fabbrini (DCU Brexit Institute)

Since 1st January 2021, the United Kingdom (UK) has exited the European Union (EU)’s internal market and customs union, as well as its area of freedom security and justice, severing the last substantive bridge connecting it to continental Europe. While in fact the UK had formally left the EU already on 1st February 2020, the Withdrawal Agreement had established an 11- month transition period, which preserved the status quo and postponed the most visible consequences of Brexit. As of 1st January 2021, EU-UK relationships have entered into a new era.

Surely, the Christmas’ Eve deal reached between the parties in the form of the EU-UK Trade and Cooperation Agreement, and a suit of several other connected treaties and declarations, has avoided the nightmare scenario of a no-deal at the end of the transition period. Nevertheless, the Agreement has not fundamentally altered the basic facts, namely that ties between the parties have now profoundly changed, with the UK ending for good its participation in the most significant dimensions of European economic and internal security integration.

Yet, one would be mistaken to think that with the new year – and the new EU-UK deal – coming in the Brexit story is over. To the contrary – leaving aside the fact that the EU-UK Trade and Cooperation Agreement has received only provisional application for 2 months, pending approval by the European Parliament – it is clear the legal architecture on the framework of new EU-UK relationship, together with that on withdrawal, envisions a number of further, future, critical steps in the Brexit process, which will create short- mid- and long-term challenges.

To begin with, short-term, the consequences of the EU-UK Trade and Cooperation Agreement will not immediately become fully visible, for instance in the field of movement of goods, because the UK back in summer 2020 unilaterally decided to phase-in the introduction of customs controls in stages, with full checks only applicable from July 2021. This means that while goods entering the EU are now immediately subject to complete customs clearance, a semblance of normality is preserved for roughly 6 more months on UK-bound movements of goods.

Besides this, the EU-UK Trade and Cooperation Agreement has established several other transitory regimes which preserve pro tempore the status quo, with the aim to phase it out in stages. For example, on data protection, Article FINPROV.10A foresees that data transfer from the EU to the UK will not be considered as a transfer to third countries under GDPR rules for a specified period of 4 months, while a Declaration attached to the Agreement formalizes the Commission’s commitment to adopt an adequacy decision within the abovementioned time-period.

Similarly, on the controversial issues of fisheries – which attracted the lame lights in the negotiations – the EU and the UK agreed in Heading Five of Part Two of the Agreement that 25% of EU boats’ fishing rights in UK waters would be transferred back to the UK over the next five and a half years. Hence, while the EU already committed to support the relevant fishermen’s affected communities through the deployment of the Brexit Adjustment reserve, the UK will regain sovereignty over its territorial waters, with the full consequences thereof, only in 2026.

The transitional phases established by the Trade and Cooperation Agreement, otherwise, combine with other important Brexit-related moments in the mid-term. On the one hand, in 2024 at the latest, the Northern Ireland Assembly will have to express its consent under Article 18 of the Ireland/Northern Ireland Protocol to be bound by the special rules created for Northern Ireland by the Withdrawal Agreement, which essentially created a customs and regulatory border in the Irish sea, in order to avoid a hard border on the island of Ireland.

On the other hand, the same Trade and Cooperation Agreement provides in Article FINPROV.3 that the EU and the UK shall jointly review the implementation of this Agreement by 2025, and every five years thereafter. In fact, if the Article FINPROV.8 ominously empowers the parties to terminate the deal with a 1 year notice period, several clauses in the Agreement point to the opposite scenario, namely the possibility for the EU and the UK to conclude in the near future several other side deals, supplementing the Trade and Cooperation Agreement.

Otherwise, the Council decision of 30 December 2020 authorizing the signing of the deal on the EU side has similarly empowered EU member states to enter, subject to conditions, into bilateral agreements with the UK on issues such as aviation, the coordination of social security systems and other matters, to the extent that these are not covered by the Agreement itself. And under the Withdrawal Agreement Ireland and the UK have of course maintained the ability to set up special bilateral arrangements, for example with regard to the common travel area.

The possibility to further expand EU-UK cooperation beyond the Trade and Cooperation Agreement is obviously welcome, considering the important list of policy areas – from external security and foreign affairs, to financial services, to educational cooperation – which are currently left out from the deal. This however once again indicates that adjustments to EU-UK relations are likely in the long-term as the settlement reached between the parties and codified in the Trade and Cooperation Agreement leaves EU-UK relationships significantly unsettled.

In conclusion, if since 1st January 2021 the UK has fully exited the EU, EU-UK relationships remain fluid, and Brexit is far from over. Although the EU-UK Trade and Cooperation Agreement has provides a framework for EU-UK relations, important short- mid- and long-term challenges remain, due to new transitional periods, inevitable implementation phases and forthcoming decision-making points. If the full consequences of the UK withdrawal from the EU will emerge only over time, suggesting that disintegration may be as time-consuming as integration, Brexit remains a complicated process, without a clear, foreseeable endpoint.

Federico Fabbrini is Full Professor of EU law at the School of Law and Government, Dublin City University, and Founding Director of the Brexit Institute

Image credit: European Commission, Participation of Ursula von der Leyen, President of the European Commission, at EU-UK Trade and Cooperation Agreements signing ceremony (Lukasz Kobus/EC-Audiovisual Services)


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