What the end of the Brexit transition period means for agencies
On 23 June 2016 the UK held a referendum on its membership of the European Union. The question that was asked was a simple one — Should the United Kingdom remain a member of the European Union or leave the European Union? — with a binary option for the response — leave or remain. The nation voted 52:48% to leave the European Union.
On 29 March 2017, the UK invoked Article 50 of the Treaty on the European Union, giving notice that it intended to leave. This notice meant that the UK was then scheduled to leave the European Union at midnight, Brussels time (23:00, UK time), on 29 March 2019. Several further negotiations resulted in an extension to that deadline, including a degree of flexibility. That was brought to an end following the December 2019 UK General Election. The UK ratified the Withdrawal Agreement soon afterwards, and as a result the UK formally left the EU at 23:00 on 31 January 2020 and entered the transition period.
During the Brexit negotiations in 2017 it was agreed that trade negotiations could only start in the transition period following the UK's withdrawal — such negotiations could not happen while the UK still retained a veto right within the EU.
The transition period that will end on 31 December 2020.
This deadline could have been extended for two years, if requested by 30 June 2020, but the UK Government declined to make such a request. The Government also stated that the only kind of trade deal the UK would be interested in, if any, is a Canadian-style trade deal.
At the time of writing, the negotiations on this trade deal have not been concluded. There is currently no trade agreement between the UK and the EU.
Consequently, the citizens and businesses of the UK, do not yet know the basis on which they can make their plans for the country’s future relationship with the EU.
It seems likely that the trade negotiations will conclude imminently, either with a deal, or with no deal. However, whichever way they end there is now very little time left until the end of the transition period for companies in the UK to put into place whatever is needed for the future in time for the deadline.
This has far-reaching implications for all businesses in the UK, whether they interact directly with the European market or not.
This briefing paper is a broad and deep examination of the matters of concern for agencies in the digital and creative sectors.
The briefing has three main components:
- A summary of the status quo, including:
- What is known on the state of trade negotiations between the UK and EU;
- Existing trade deals via the EU that will roll over after the end of the transition period
- New trade deals with other nations or trading blocks since leaving the EU.
- Mutual recognition agreements, in lieu of trade deals.
- A discussion of the issues at stake for agencies, covering:
- Access to Europe, for markets, travel, shipping, etc.;
- Legal and regulatory matters;
- The impact of Brexit on services;
- Contracts and legal issues for agencies;
- Currency risks;
- Data protection and data privacy after the end of the transition period;
- People, whether staff, clients or suppliers.
- A thorough review of the impacts on agencies:
- Deal or no deal, what does it mean?
- Practical implications
- The mitigation options
The briefing concludes with an important set of questions for agency boards to consider as the UK moves into a new relationship with the EU.