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Brexit by Numbers


Article from the Journal (3 January) by Jack Simpson, Chamber policy adviser.

534 days after voting to leave the European Union, the British Government and European Union finally agreed to divorce. So, on March 29th 2018 marks “Phase Two”, the negotiation of the new relationship, which begins with withdrawal formalisation. While an agreement is in place, this stage will see the negotiators flesh out details on citizen rights, potential bill and, of course, the Irish border. Avoiding a hard border and establishing the fabled alignment will prove a challenge on both sides of the table.

From about March, trade talks should begin, and will require most of the negotiating time and resources. The UK government has outlined its vision for a “bespoke and ambitious” deal, but has been ridiculed for taking the whole cherry tree. In response to May’s “red lines”, Chief-EU negotiator, Michel Barnier, insists only two options remain for the UK, a third-party deal, or WTO default. There’s room for compromise, but could easily get ugly.

If Brexit wasn’t complicated enough, it’s likely there will be negotiation on negotiations. Both parties agree to a post-Brexit transitional phase, however, May wants to use this period to gradually leave sectors of the EU before departing. The EU27 oppose this, and want the UK to retain full membership until transitions end, so not to compromise the four freedoms. But now, even the end date is being contested! This transitional framework should be agreed around early summer, to facilitate smoother trade talks… I hope.

Brexit negotiations, in whatever format, must be concluded by October 2018 to allow each side to ratify the deal. While eight months seems a short amount of time to negotiate one of the most important political texts in British history, it is possible that the parties will agree to a broad outline of what Brexit will look like, and use the transition period to work out the details, and any kinks.

Relying on the EU for 60% of our exporting market, it’s essential that we get a deal that works for the North East. But, there’s a long way to go, and any number of events, elections, and breakthroughs, could alter the Brexit process. As the ancient saying goes, it is the “unknown unknowns” that cause most problems.