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Brexit Negotiations Explained

2018-07-16 18:51
The referendum vote left the nation divided   52% of Brits voted to leave the EU — the “Leavers” 48% voted to remain — the “Remainers” However, only 1/3 of lawmakers voted to leave Even Prime Minister Theresa May was a Remainer until she was voted into office with a mandate to enact Brexit Experts describe Brexit as the biggest and most complicated undertaking since WWII Here’s why Brexit isn’t over yet 1. THE DIVORCE After 43 years of marriage, the UK is leaving the EU But before they can go their separate ways … comes the divorce settlement There’s the money The UK is expected to pay a “divorce bill” of £30-£40 billion to cover outstanding bills and the like There’s the kids (around 4.5 million of them) The two parties need to agree on the rights of 3.7 million EU citizens in the UK and the 800 thousand UK citizens in the EU Then there are the odds and ends to tidy up Customs arrangements Trade terms Security Northern Ireland border arrangements Even then, many issues will need to be resolved after the deal And course, the parties still have to live as neighbours no matter what They get 2 years to agree. The clock has been ticking since March 29, 2017, when the UK triggered Article 50. So once the lawyers have hashed it out, the two just need to sign and that’s it, right? No. This is where the divorce analogy falls apart 16 of the 27 national leaders in the European Council (representing over 65 percent of the EU population) need to agree on the deal And a majority of the 751 members of the European Parliament also needs to sign the paperwork And if they don't agree? An extension can be granted to negotiations—but only if all 27 member states agree And if they don’t all agree? We’ll get to that later 2. LEAVING THE CLUB “I don’t want to belong to any club that will accept people like me as a member.” — Groucho Marx No one wants to belong to a club that offers the same benefits to non-members as members The EU will try to ensure the UK doesn’t get the benefits of membership without the costs If it does, the deal risks undermining the EU’s existence   Membership means signing up to the four freedoms Plus there are certain opt-ins like using the Euro and joining the Schengen open border zone No one has ever left the club before With business interests, regulations, and trade entwined among member states, experts warn it could take a decade to disentangle 3. HAVING YOUR CAKE Foreign Secretary Boris Johnson famously said the UK would be able to “have its cake and eat it” in negotiating a new deal with the EU “Brexit cake” has become a joke among EU leaders who insist the UK cannot come out with a better deal than it started with The EU’s negotiation mantra is that “nothing is agreed until everything is agreed” How far the EU might go in allowing a compromise is unknown 4. BREXIT SOFT OR HARD? Brexit isn’t just a matter of being in or out of the EU It’s about the future relationship with the EU—and that creates a sliding scale … from soft to hard The closer it is to status quo, the ‘softer’ the Brexit The Norway model, for example, might be seen as a soft Brexit. Norway is not a member of the EU so it cannot vote on EU laws and regulations But it has access to the EU’s single market, allowing free trade A ‘hard Brexit’ would mean much more independence, and also more barriers to trade
 5. THE CLIFF EDGE Negotiations are hurtling towards the deadline of March 29, 2019. But if a deal isn’t in place, what happens? If no deal is reached, then trade defaults to World Trade Organisation rules Leaving with no deal is also called “crashing out” of the EU—the ultimate “hard Brexit” Businesses are worried about a “Cliff Edge” scenario—the UK leaving the EU without new regulatory frameworks in place, or with too little time for them to adjust supply chains