The EU and the UK Government have agreed and (kind of) approved an updated Withdrawal Agreement. Whilst a so called ‘flextension’ has been adopted by the EU until 31 Jan 2020 to allow further time for the ratification of the Withdrawal Agreement Bill (WAB), as with all things Brexit, significant uncertainty remains.
If or when the Agreement will ultimately be ratified will depend on how political events unfold over November and December 2019.
If implemented, the Withdrawal Agreement will be significant for businesses based on the island of Ireland. The extent of the impact will depend on their supply chains. Clarifications on certain aspects of the Agreement dealing with trade between NI and GB will also be relevant for certain businesses.
The transition period for the Agreement is due to expire on 31 December 2020.
The transition period for the Agreement is due to expire on 31 December 2020 – little over a year away. The Agreement provides that the UK and the EU can, up until 1 July 2020, agree to extend the transition period by 2 years to 31 December 2022. If there is no Free Trade Agreement (FTA) by 31 December 2020 and no extension to the transition period is agreed by 30 June 2020, trade between the UK and the EU will default to World Trade Organisation (WTO) terms on 1 January 2021.
Depending on political developments, these timelines could become critical for businesses. In such a scenario North-South and South-North trade would still be governed by the Protocol.
If the Agreement is ratified, all eyes will in our view quickly turn to the FTA negotiations, the possible extension of the transition period, and to the workings of the Committees established under the Agreement to deal with certain aspects of the Protocol.
If you would like to discuss the above and its potential impact on your business, please get in touch with our Brexit Response team or your usual KPMG contact.