So here we are. After all the huffing, puffing and stuffing around, it’s finally happening: Britain is leaving the European Union on January 31. Kind of.
The Brexit saga has strangled the nation ever since the Conservative Party first promised a public vote on whether to break up with the EU. It has been going on for so long that babies born on referendum day will start school later this year.
Having claimed the political scalps of Tory leaders David Cameron and Theresa May, the Brexit chaos helped Boris Johnson seize the prime ministership and win the December 12 general election with a simple but devastatingly effective “Get Brexit Done” message.
It was a powerful promise that delivered the biggest Tory parliamentary majority since Margaret Thatcher in the 1980s – more than enough to sweep away the House of Commons gridlock that had stood in the way of implementing what British people voted for in June 2016.
Brexit will now take effect at 11pm on the last day of the month. There was even talk of rushing through restoration works on Big Ben so it could chime to celebrate the moment, but the government backed down on this, saying more muted celebrations would “heal divisions and reunite communities”.
But “bongs” or not, Brexit will be far from over on January 31.
Hold on, what is the European Union?
The EU is a grouping of 28 countries whose citizens have the right to work and live in whichever of the 28 they like. It also allows the free movement of goods between all members. Brexit is uncharted territory because Britain will be the first member state to leave the EU as it is now structured.
What will be different on February 1?
Not much. After all the hype, little will change immediately in Britain or Europe. That’s because Britain will, technically, stay part of the EU for another year.
The simplest way to get your head around Brexit is to think of it as two parts. The first part is the Withdrawal Agreement – the deal between Britain and the EU that covers some of the big process questions about how the January 31 split will happen. The Withdrawal Agreement was repeatedly blocked in the House of Commons but passed earlier this month thanks to Johnson’s new majority.
The second and more relevant part now is what’s known as the transition period. This is where the hard work really begins. The EU and Britain will use the period to thrash out how they work together in the future on trade, human movement, security, data sharing and all sorts of other really tricky issues.
The problem is the transition period is incredibly short. It starts on January 31 and ends on December 31, 2020. Britain and the EU spent 34 months settling the terms of the exit but have now given themselves just 11 months to map out the terms of their new relationship – even less, really, considering EU officials probably won’t begin negotiations until March and want the deal settled on paper by the end of November. The clock is ticking.
During the transition period, Britain’s trading relationship with the EU will remain as is and Britain will continue to make financial contributions to the bloc.
What happens if they can’t work out a deal?
Critically, Johnson has ruled out asking for any extension to the December 31 deadline. A British-EU summit set for June will give Johnson the opportunity to seek more time, but there’s no way he will ask for it because an extension would be an extraordinary breach of faith with voters who just want Britain to leave.
Unlike other trade talks, where a failure to strike a deal would mean the status quo prevails, a collapse of talks here would mean Britain defaults to trading with the EU on World Trade Organisation terms, causing mass chaos with the business community and long queues at the border. Basically, it would be the “hard” Brexit so many have feared throughout this saga.
Many trade experts believe that Britain will struggle to strike a deal by December 31.
“Given how much effort this will involve, the proposed timeframe looks positively heroic,” says Institute for Government senior researcher Maddy Thimont Jack.
But Johnson has a history of exceeding expectations and believes the tight deadline will actually force the EU’s hand at the negotiating table.
One possible outcome is a basic trading agreement that will minimise the potential economic damage of “no deal” but kick the big issues well down the road into 2021.
What are the most pressing things to sort out?
Trade and security top the list.
There is a lot at stake if tariffs return or new customs checks interrupt the free flow of goods across the English Channel. According to a House of Commons briefing paper, the EU is Britain’s largest trading partner. In 2018, British exports to the EU were worth £291 billion ($556.8 billion), or 45 per cent of all British exports. British imports from the EU were worth £357 billion.
There is also the hugely complex issue of the island of Ireland. Under the current system, goods move uninterrupted between the Republic of Ireland and Northern Ireland. But Brexit will introduce a new set of customs rules between the two.
Part of the Good Friday peace agreement guarantees no physical division between Ireland and Northern Ireland.
To get around that problem, customs checks and controls will apply for goods moving from mainland Britain into Northern Ireland. This ensures no physical checks or controls on the land border between Northern Ireland and the Republic.
Goods moving directly from Britain to Northern Ireland won’t be subject to tariffs unless the good is at risk of then moving on to the EU.
This new regime requires a huge amount of planning work and poses serious challenges for Downing Street. There are already fears a massive new computer system needed to regulate the new scheme won’t be ready in time.
On security, a failure to secure access to the Second Generation Schengen Information Scheme could leave Britain without access to a database of tens of millions of alerts that help authorities identify serious offenders. There are also questions to solve on warrants, terrorism, international crime, cyber-security and hybrid threats.
What else is on the table?
Leaving requires unpicking the results of four decades of co-operation. It really is the ultimate unscrambling of the egg. The closer the deadline comes, the clearer it is the extraordinary degree to which aspects of British life are directly tied to the EU.
Agreements on data sharing, aviation standards and safety, access to fishing waters, supplies of electricity and gas, and medicine regulation all need to be worked out during the transition period.
How are the new arrangements likely to affect Australia?
Britain’s departure from the European Union means it must seal new free trade terms with major economies, including the United States and Australia.
Britain is Australia’s eighth-largest trading partner, with two-way trade valued at $26.9 billion in 2018. Britain is also the second-largest source of total foreign investment in Australia.
January 31 will trigger formal negotiations between Australia and Britain on a new free trade deal but in reality they have been at it for many months already.
For Australia, the obvious areas where it can increase export volumes are wine, beef, sheep (meat), sugar, rice, butter and cheese.
The Australian meat industry, in particular, wants a stronger foothold in the British market but has so far been restricted by EU rules and regulations, including a ban on hormones in beef. But when Britain asked the public and business community what they thought of a trade deal with Australia, some worried about reducing health and safety standards and others suggested that tariffs should be maintained in the agricultural sector or reduced over time to “manage any negative impacts to UK industries”.
There was talk the new deal could clear the way for visa-free work and travel between both countries but both sides have since ruled that out.
Brexit 2020: a calendar of key events
- Late January: The legal version of the Withdrawal Agreement, known as the Brexit bill, will pass the House of Lords and may go back to the House of Commons for final approval if any minor changes are made.
- January 31: Britain formally leaves the European Union at 11pm.
- February 25: EU member states will meet in Brussels and may agree on a mandate that will guide the EU’s approach to negotiations during the transition period.
- July: The EU and Britain will hold a summit to assess the progress of negotiations. It is here that Johnson will have the chance to seek an extension to the transition period, now scheduled to end on December 31, 2020.
- Late November: EU legislators want to meet to sign off on all the new deals that have been negotiated over the course of the year.
- January 1, 2021: The new relationship between the EU and Britain should start.
Bevan Shields is the Europe correspondent for The Sydney Morning Herald and The Age.