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What does Brexit mean and what are its impacts on the relation between Britain and EU?
After the referendum held on Thursday 23 June 2016, to decide whether the UK should leave or remain in the European Union… UK is leaving. Britain is exiting: Brexit!
First it should be clarified that for the UK to leave the EU ,it has to invoke an agreement called Article 50 of the Lisbon Treaty which gives the two sides two years to agree the terms of the split. This means the UK will be expected to leave by the summer of 2019.
A negotiation will take place between the UK and the EU about the future relationship between the two parties. The major questions to solve will be concerning the two big subjects, Trade, and immigration.
Meanwhile people live a period of uncertainty. Everybody is wondering what would be the new agreements in the continent. Even more crucial is the destiny of the free movement in the area.
In the meantime, EU law still stands in the UK until it ceases being a member. The UK will continue to abide by EU treaties and laws, without taking part in any decision-making. – the free movement will continue as normal. The European Health Insurance cards also remain valid. And there will be no changes to the way we travel around the continent until the two-year negotiation period is over.
But what will occur after leaving? what will be the impact of Brexit on the EU and UK citizen’s situations. What will happen to UK citizens working in the EU? Will immigration be cut? Will UK citizen need a visa to travel to the EU? What will be the future of the single market?
To answer all these questions, it will be interesting first to provide some basic information about the EU, the single market and about how does it function.
A-EU and the single market:
a-The Eu and how it functions:
The European Union (EU) is a group of 28 countries that operates as a cohesive economic and political block. The EU was created in the intention to build a legally and politically independent entity that unify the European countries and put an end to the intolerable world wars.
The EU has its beginning in the European Coal and Steel community in 1950, and it became the EEC later under the treaty of Rome in 1957; The European community started to expand and was replaced in 1993 by the European Union under Maastricht treaty which provided for the creation of the euro;
The overall function of the European Union is to create and implement laws and regulations that integrate the member states of the EU; The countries of the EU are supposed to have uniform laws and policies concerning a variety of things for achieving political and economic integration;
One of its biggest achievements is the incorporation of the four freedoms through the implementation of the Single Market.
b-The single market:
The single market is the EU's biggest achievement and one of the main reasons it was set up in the first place. The European Union single market, which was completed in 1992, seeks to guarantee the four freedoms: free movement of goods, capitals, services, and people within the European Union, as if it was a single country. The market encompasses the EU s 28 member states and has been extended to some other countries with bilateral treaties. The idea of the market is to increase competition, specialization with the intention to boost trade, create jobs and lower prices;
The origin of this market was the constitution of the European Economic Community(EEC). the evolution went on through some serious struggles and difficulties. In 1997 the Amsterdam Treaty abolished physical barriers across the internal market by incorporating the Schengen Agreement which implements the abolition of borders controls between most member states, the common rules on visas, and the police and judicial cooperation.
Nowadays this agreement is strongly criticized as it is majoring the possibilities of free circulation on the borders which increases the risks of probable terrorism.
B-Impact of Brexit on UK And EU future relationship:
a-Importance of the negotiations:
The major impact of Brexit concerns two important subjects:
The immigration and the trade;
The problematic here is that the reason for UK to leave is mainly related to immigration facilities in the EU; On the other side UK is still very interested about staying part of the European single market;
The challenge for the UK's Brexit talks will be to do enough to “tackle immigration concerns while getting the best possible trade arrangements with the EU”.
As for the EU, it will only allow the UK to be part of the European single market (which allows tariff-free trade) if it continues to allow EU nationals the unchecked right to live and work in the UK.
The negotiations between both parties will be focusing on finding a midway between the restrictions that UK would like to impose on the free movement from one side and the advantages of staying part of the single market from the other side. Everything depends on the kind of deal the UK agrees with the EU;
b- importance of the consequences:
Will a visa be needed to travel to the EU? And vice-versa?
Again, the answer to this question depends on whether the UK government decides to introduce a work permit system of the kind that currently applies to non-EU citizens, limiting entry to skilled workers in professions where there are shortages. While there could be limitations on British nationals' ability to live and work in EU countries, it seems unlikely they would want to deter tourists. There are many countries outside the European Economic Area that British citizens can visit for up to 90 days without needing a visa and it is possible that such arrangements could be negotiated with European countries.
2- Trade conditions:
There is no doubt that Brexit will lead to a big transformation in the continent especially if, Britain will no more be member of the free market agreement. The benefits of the free movement won’t be the same anymore. The imported goods will consequently get more expensive - that means food, clothing and homeware are all likely to get pricier.
The pound s loss of value is one of the alarming signs even though it regained some of its value.
But on the other hand, we believe that negotiations will come up with some compensative agreements .UK, is certainly aware of the drastic consequences if it doesn’t reach a smart deal!
The key issue is for UK to keep having access to the single market, while at the same time being allowed to restrict the rights of EU citizens to live and work in the UK. And we never know! Negotiations can even surprise us and UK may end up convincing the EU of the danger of the free circulation!
But for those who really fear this heavy decision let us remind you that Britain was a member of a free trade area in Europe before it joined the common market. And in a free trade area, countries can trade with each other without paying tariffs.
An important issue concerns more specifically the private contracts conditions. After Brexit UK may no longer be bound by EU law or at least by most of it.
That means most of the contracts that are concluded under EU regulations will have to face a very new and weird situation: which law to follow?
This question leads to another big question: can Brexit be considered as a” Force Majeur” that can free the parties to the contract from their obligations and allow the resolution of the contract? What will be the situation in both cases?
All these questions will need a more detailed and specific study. This will be our main subject for the next publication.
Meanwhile, one thing is certain! There will always be a way to survive Brexit! Don’t forget to follow us and for more information.
Please contact Patricia Leers.