House of Commons Library

Brexit Unknowns (update)

Published Wednesday, September 26, 2018

What do we still not know about the Brexit process or the withdrawal agreement with the EU that is currently being negotiated? This paper looks at some of the main unknowns.

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The Brexit process

The Article 50 process stipulates a broad sequence of events and a two-year period in which time a withdrawal agreement must be agreed or a State leaves the EU without one. We do not know whether a withdrawal agreement will be agreed within this time limit or what will happen if the UK ‘crashes out’ in March 2019. Article 50 does not make clear whether the withdrawal process can be reversed if the leaving State changes its mind.

Constitutional issues

Constitutionally, there are several aspects of the Brexit process in respect of which there is considerable uncertainty. Although the European Union (Withdrawal) Act 2018 provides a Parliamentary process for approval of the Withdrawal Agreement, it cannot be said with confidence, for instance, what the implications would be if the Commons purported to give “qualified approval”. We do not know the extent to which Parliament will have opportunities to scrutinise the Withdrawal Agreement before voting on it. There is considerable ambiguity as to the extent to which Parliament can influence the Government’s approach in the event that a deal is rejected, or that no deal can be reached. Most notably, we do not know whether the UK’s notification of intent to withdraw is revocable, although the Government maintains it will not request this.

Devolution

In terms of the devolution settlement, there is still considerable uncertainty as to the impact Brexit will have. We do not yet know how the UK Government will go about temporarily ‘freezing’ devolved powers returning from the EU; nor do we know much, if anything, about the long-term proposals for what should replace EU “common frameworks”. Much of the detail of these new arrangements will only become fully apparent after exit day.

Trade relations

Rollover of current EU third country agreements

Although there is agreement in principle that current EU agreements with third countries will be ‘rolled over’ for the UK, at least for the transition period, we do not yet know whether the UK will be able to transition the existing EU FTAs into its own bilateral trade agreements on time. After leaving the EU, the UK plans to pursue an independent trade policy and sign its own free trade agreements (FTAs) with non-EU countries. The biggest unknown is still that we do not know what the trade arrangements between the UK and the EU will be after Brexit; their scope and depth will also depend on whatever trade deal the UK agrees with the EU.

EU-UK trade relations

We do not yet know what the trade arrangements between the UK and the EU will be after Brexit. If there is a transition/implementation period, trade relationships will remain more or less the same and the UK and the EU will retain access to one another’s markets on current terms. The UK and the EU will have time to work out the details of their future trade agreement in the transition period. Before that, however, both sides still need to find a compromise on basic principles of future trade or put at risk the ratification of a withdrawal agreement, which might mean the UK leaving the Single Market without a deal.

The Irish border issue

The fate of the Northern Irish border remains one of the greatest sources of Brexit unknowns. This is because despite forming a key plank of the Withdrawal Agreement, its final status can only be understood in reference to the future relationship between the UK and the EU, which is yet to be agreed.

Free movement of people

While Part Two of the draft Withdrawal Agreement on Citizens’ Rights has been largely agreed, there is still uncertainty over whether certain categories of beneficiaries of EU law rights are covered by it. The UK Government’s Statement of Intent for its ‘settled status’ process has not been reciprocated with a detailed process from the EU27 for UK nationals to register their status in EU27 countries.

Regarding the future relationship, EU and UK nationals who do not benefit from the Withdrawal Agreement will be covered by rules other than the existing ‘free movement’ rules. This could mean either a new negotiated regime or respective ‘standard’ migration rules as applicable to third country nationals. So it is not clear whether UK nationals living in the EU after Brexit will be subject to a general third country national regime, or whether there will be a more generous ‘movement agreement’ that continues to facilitate working and living in the UK or the EU27 for respective nationals. The EU27 have not yet indicated their preferences.

Settling financial commitments: the ‘exit bill’

While estimates have been produced about how much the financial settlement might cost the UK (roughly £35 billion - £39 billion) the true cost will not be known until the UK has made the final payment. The UK will pay for items in the settlement based on the actual outcome of EU budgets, which will be affected by future events, and won’t be required to pay earlier for items than if it had remained in the EU.

UK participation in EU programmes and agencies

The UK Government would like to take part in some EU programmes and agencies as a third country after Brexit and expects to make a financial contribution towards those it participates in. Participation and the costs involved will be discussed in negotiations on the future UK-EU relationship. At this stage we don’t know what the UK will participate in nor how much it would cost.

Security, law enforcement and criminal justice cooperation

The UK currently participates in around 40 EU measures that aim to support and enhance internal security and police and judicial cooperation in criminal matters. The extent to which the UK will continue to be able to participate in these measures post-Brexit is currently unclear.

Data protection and data sharing

We do not know on what basis the UK will be able to exchange data with the EU and EEA after Brexit. The European Council’s March 2018 guidelines state that, on data protection, a future EU-UK relationship should be governed by the EU’s adequacy framework. However, the UK wants to “go beyond” this.

Food and farming

The biggest unknown in the agri-food sector is the future trading environment in which farmers and the wider food supply chain will be operating, and the kinds of plant and animal health regimes and checks which will apply. However, farmers across the UK have had some indication of the future farm support systems that are likely to be introduced after EU Exit.

Fisheries

While the EU and the UK have both set out their position on what they want a deal on fisheries to look like, fisheries have not a yet been part of the detailed withdrawal negotiations, and there are disagreements over future fisheries arrangements.

Defence

The Government has said UK support for European defence and security is unconditional and the March 2018 draft withdrawal agreement raised the possibility of an agreement in security and defence matters being implemented before the end of the transition period. While that remains the aspiration on both sides, many of the details of UK participation in EU defence matters are still to be negotiated and agreed upon.

Statistics

While the Government has said that the UK will continue to play an active role in the international statistical community, the UK’s future relationship with the European Statistical System is largely unknown.  

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