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Withdrawal Agreement and the North East


Following the publication of the European Withdrawal Agreement, Jack Simpson looks at what this means for the North East, and what next for Brexit negotiations.

Last night, at about 8pm, we finally found out what Brexit really means. Following two years of negotiations, the UK Cabinet backed the Prime Minister on the Withdrawal Agreement from the European Union. It has been a rollercoaster 12 hours, with 585 pages of text, numerous statements and speeches, and, at the time of writing, five Cabinet resignations.

What did it say?

On Trade, much will remain the same. A transition period has been agreed, which means the UK will leave European institutions and agencies, but remain in the Single Market and Customs Union, while still aligning on rules. regulations and standards (to ensure a fair and level playing field). Relying on the EU for 57% of regional trade, this is a long awaited commitment, allowing business to continue trading as usual, however, until the future trading relationship is finalised, it will not remedy any concerns over longer term investment.

On this, the UK loses its decision making powers and must be party to new laws made until 2020, but there is room for us to be consulted on certain issues, like fisheries and other sensitive sectors. This has caused much tension in Cabinet, as some claim it makes the UK a "rule taker", while others argue it's part of the process to become an independent state.

EU citizens in the UK, and vice versa, will continue to live and work as normal, and to enjoy the rights of any other citizen. Furthermore, it was agreed this week that both sides would agree to provide visa free travel for short stay citizens of the other state. The North East would therefore still have continued access to skilled European Labour, and students can continue to move accordingly.

The North East as a historic and developing region for innovation and Intellectual Property is key to ensure this. It is therefore welcome that the Withdrawal Agreement will continue to respect and protect issued patents, copyrights and geographical indicators, and our future relationship must build on this to allow regional innovators to develop in confidence. The UK has already announced its commitment to replicate GDPR post-Brexit, and data handling will be met with reciprocity in the EU.

Getting Legal, a new panel will be established to review how laws are being implemented and that withdrawal is being done right on both sides. This ends the role of the ECJ, or severely limits its influence, as 10 figures from each side will review cases, and in the case of a tie, it will be referred to independent global jurors to review. The EU Court will be given authority only in the case of EU law.

Finally, the Backstop. A protocol to ensure that there will be no border on the island of Ireland. The UK-EU agreed, that in the absence of a long term solution, the UK would enter a new customs territory with the EU, however N. Ireland would take more of a lead from the EU on market regulations to ensure a frictionless border. If the UK falls seriously foul of the Withdrawal Agreement, the EU could takeover N. Ireland customs and levy policy, putting the border in the Irish Sea. They hope to have a solution ready by 2020 to avoid the Backstop.

So what is next?

Politically, if all goes to plan, a special EU-UK summit has been announced and will be held on the 25th November to discuss the future relationship, with a standard EU summit held on December 13-14th. Parliament will vote on Withdrawal early December- if rejected, we’d have 21 days to make a new plan.

For business, changes to the EU relationship will be made as negotiations progress, rather than at once. On various issues, the Withdrawal text states that we will continue as before, until a new system is agreed.

This could be beneficial, as it means business will be allowed to adapt to new changes to the UK EU relationship as they happen, and allow time to iron out any issues or problems that arise. This provides a gradual transition to Global Britain, rather than simply moving the “cliff edge” to December 2020. However, we must see now see progress rapidly, with over 140,000 regional jobs reliant on EU trade, we must provide assurances to those businesses that the UK is open for EU business.

Now that Brexit is a reality, business should now use this chance to start reviewing their business models, and develop their Brexit resilience. Check the Chamber and Growth Hub sites for advice and support in getting your business Brexit Ready.