TradeLane

On July 12^th, the UK government published a whitepaper specifying broadly their proposal for a post-Brexit relationship with the European Union. This much-anticipated document outlines the UK Government’s best-case scenario on customs and trade policy after the separation. The below details reflect the UK Government’s desired outcome, not the final agreement between the UK and EU.

At present, there seems to be a renewed interest in the venerable Winston Churchill in popular culture. Between John Lithgow’s portrayal in The Crown and Gary Oldman’s version in The Darkest Hour, we are presented with a reintroduction to some of Mr. Churchill’s more memorable quotes. One of my favourites is, “There is nothing wrong with change, if it is in the right direction.”

Unfortunately, this quote does not accurately reflect customs duty adjustments based on retroactive changes in transfer pricing agreements.

On March 29^th, UK Prime Minister Theresa May sent a letter to European Council President Donald Tusk invoking Article 50 and providing formal notification that the UK will leave the European Union. The formal countdown clock is underway, and the UK and EU have two years to finalize the terms of the UK’s departure.

In reading the letter, there are a few statements that provide guidance on the potential future for customs legislation, as well as the trading relationship between the UK and EU.

Since the Brexit referendum was held, the UK government has focused significant time and energy on establishing a negotiating position for the separation. The policy was outlined in an early February 2017 whitepaper entitled, “The United Kingdom’s Exit from and new partnership with the European Union.” While not delving into significant detail on the referendum’s impact on trade, nor the UK’s negotiating tactics, the policy document outlines the ultimate goals for the separation.

A lot has happened since the June 24^th referendum in the UK to leave the European Union. Surprisingly, there may be more uncertainty now than there was immediately following the vote three months ago.

We’ve since gotten a new Prime Minister, Theresa May, who has formed a government department to manage the negotiation process with the European Union - dubbed “The Three Brexiteers.” The principle architects for the Brexit negotiation are David Davis, the Secretary of State for Brexit; Liam Fox, the International Trade Secretary; and Boris Johnson, the Foreign Secretary.

So, now that we have some clarity on who will be in charge of negotiating the terms of Britain’s exit from the European Union, we should know how the process will unfold and what impact this will have on UK, European, and global businesses, right?