7 PM | It’s a deal: On Brexit | 21st October, 2019

Context: Boris Johnson’s new Brexit deal.

More in news:

  • The UK is due to leave the European Union (EU) on 31 October 2019. 
  • Prime Minister Boris Johnson sent an unsigned letter to the European Union requesting a delay to Britain’s exit from the bloc.
  • Labour and the Liberal Democrats have demanded that the deal be put to a confirmatory referendum.

BREXIT: ‘Brexit – British exit’ – refers to the UK leaving the EU.

European Union:

  • The EU is an economic and political union involving 28 European countries.
  • It allows free trade and free movement of people to live and work in whichever country they choose.
  • The UK joined in 1973 (when it was known as the European Economic Community).
  • If the UK leaves, it would be the first member state to withdraw from the EU.

Why is the UK leaving?

  • A public vote – or referendum – was held in June 2016, to decide whether the UK should leave or remain.
  • Leave won by 52% to 48%.

Why hasn’t Brexit happened yet?

  • Brexit was originally due to happen on 29 March 2019. That was two years after then Prime Minister Theresa May triggered Article 50, the formal process to leave and kicked off negotiations. But the Brexit date has been delayed twice.
  • A deal was agreed in November 2018, but MPs rejected it three times.

Why did Parliament reject Theresa May’s Brexit deal?

  • The main sticking point for many Conservative MPs and the Democratic Unionist Party (DUP) (the government’s ally in Parliament) was the ‘backstop’.
  • Backstop was designed to ensure there would be no border posts or barriers between Northern Ireland and the Republic of Ireland after Brexit.
  • If it had been needed, the backstop would have kept the UK in a close trading relationship with the EU and avoided checks altogether.
  • But many MPs were critical. They said if the backstop was used, the UK could be trapped in it for years. This would leave the UK stuck in the EU’s customs union, preventing the country from striking trade deals with other countries.
  • Their opposition eventually led to Theresa May’s resignation. Boris Johnson took over as PM in July 2019.
  • On 17 October, Mr Johnson announced that a revised deal had been agreed between the UK and the EU.

What is the new Brexit deal?

The new deal has the following changes:

  • Customs:
    • The new deal replaces the backstop with new customs arrangements.
    • The whole of the UK will leave the EU customs union. This means the UK will be able to strike trade deals with other countries in the future.
    • There will be a legal customs border between Northern Ireland and the Republic of Ireland (which stays in the EU). 
  • Regulations on goods:
    • When it comes to the regulation of goods, Northern Ireland would keep to the rules of the EU’s single market, rather than UK rules.
    • That removes the need for product standard and safety checks on goods at the border between Ireland and Northern Ireland, because both will be part of an “all-island regulatory zone”.
  • Enforcing the rules:
    • This will be done by UK officials at “points of entry into” Northern Ireland, but the EU will have the right to have its own officials present.
    • It seems those EU officials may be able to overrule UK officials. 
  • Northern Ireland’s say:
    • Because Northern Ireland will be set apart from the rest of the UK when it comes to customs and other EU rules, the deal gives its Assembly a vote on these provisions.
    • But this vote would not happen until four years after the end of the transition period that is due to run until the end of 2020 – so no earlier than January 2025.
  • VAT: The new agreement says that EU law on value added tax will apply in Northern Ireland, but only on goods, not services.

Some things have not changed: Much of Theresa May’s original Brexit deal will remain as part of the overall agreement. Some of the key areas are:

  • Transition:
    • The transition – a period of time during which all of the current rules stay the same allowing the UK and the EU to negotiate their future relationship – is due to last until the end of December 2020.
    • The transition can be extended, but only for a period of one or two years.
  • Citizens’ rights:
    • UK citizens in the EU, and EU citizens in the UK, will retain their residency and social security rights after Brexit.
    • Freedom of movement rules will continue to apply during transition. This means that UK nationals will be able to live and work in EU countries (and EU nationals will be able to live and work in UK) during this period.
  • Money:
    • The UK will have to settle its financial obligations to the EU.
    • There is no precise figure but the biggest part of this “divorce bill” will be the UK contributions to the 2019 and 2020 EU budgets.
  • Future UK/EU relationship:
    • This is addressed in the political declaration. This text, which is not legally binding, has also been revised by UK/EU negotiators.
    • It says that both sides will work towards a Free Trade Agreement (FTA) and a high-level meeting will be convened in June 2020 to take stock of progress towards this goal.

What is a no-deal Brexit?

  • In a no-deal scenario, the UK would immediately leave the European Union (EU) with no agreement about the “divorce” process.
  • Overnight, the UK would leave the single market and customs union – arrangements designed to help trade between EU members by eliminating checks and tariffs (taxes on imports).
  • No deal also means immediately leaving EU institutions such as the European Court of Justice and Europol, its law enforcement body.
  • Membership of dozens of EU bodies that govern rules on everything from medicines to trade marks would end.
  • And the UK would no longer contribute to the EU budget – currently about £9bn a year.
  • Under both former Prime Minister Theresa May’s deal and successor Boris Johnson’s deal there would be a transition period until the end of 2020.
  • This is to provide some breathing space, maintaining much of the status quo, while the two sides try to negotiate a trade deal.
  • If there is no extension then either the deal with the implementing legislation must be passed, or there would be a no-deal Brexit on 31 October. The only other option would be to revoke Brexit.

Source: https://www.thehindu.com/opinion/editorial/its-a-deal/article29752732.ece

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