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Brexit Withdrawal Agreement- What does it mean?


A look at what the new Brexit Agreement is, and what impact it will have.

Parliament has voted to approve Boris Johnson's new Withdrawal Agreement, and is now waiting royal approval. This is the Agreement that settles how the UK will leave the European Union, and will come into force on January 31st, 2020. While a bulk of the Agreement remains unchanged from Theresa May's deal in 2019, there are some notable changes. Click here for a breakdown of Theresa May's Agreement.

On January 31st, we will enter a 'Transition Period', where it will be business as usual whilst a new relationship with the EU is finalised. There is a penciled EU-UK summit in June 2020 will reveal progress being made towards a new deal, with an unofficial cut off point by November (so both parties can agree to it). The table below sets out what the impact will be for business, citizens and politicians through the new year, as Brexit enters phase two of negotiations.




Transition Period

From January 31st, the UK will enter a Transition Period until December 31st, 2020.

During this period, the UK will remain aligned to EU law and trading terms.

This is so business, citizens and other can prepare for life outside the EU, while the Government negotiates the final deal.

This may be extended by up to two years in June 2020.

Business will be able to continue trading as normal during the transition period with no extra documents needed for EU and EU-party states.

This is marks a point of no return for Brexit, so a hard cliff edge appears on December 31st, 2020.

A No Deal outcome can occur if no new relationship is agreed by January 2021.

Citizens’ Rights and Migration

UK and EU citizens will retain their residence and rights post-Brexit.

Migrants arriving before January 2021 and living for five years can apply for permanent residence.

Freedom of Movement will continue during transition, to be replaced by a points-based system.

Visas will not be required during transition.

Business will still have access to EU workers during transition but will change to a new system post Brexit.

Business looking to retain EU workforce should support their Settled Status applications. UK guidance here.

Trading with Northern Ireland

Northern Ireland will remain aligned to some EU rules to prevent a hard border with the Republic of Ireland, especially in VAT, State Aid, Agriculture and regulatory rules.

Northern Ireland will be a part of independent UK trade policy.

A joint committee will be established to assess which UK to NI products are at risk of entering the EU, and so subject to EU tariffs.

When trading with Northern Ireland...
Animals, animal products and plant exporters will need sanitary and phytosanitary checks at designated zones.

Risk based checks will be required on certain industrial products.

No tariff applied to products remaining in UK area/not going to the EU.

EU tariff will be applied if the product is at risk of entering the EU (criteria not yet defined). Worst case tariff list here.

Money and Laws

The UK will pay the divorce settlement for the projects and programmes it has been a part of. No figure stated but estimated around £32bn.

Although a joint UK-EU panel will aim to resolve any disputes, UK will adhere to European Court of Justice, until transitions end.

Commitments to Labour & Environment rights have been moved from the Withdrawal Agreement to the next round of talks.

Business will still adhere to European rulings but could see later changes on labour and environment rights.

Parliament Oversight Government no longer has to seek Parliamentary approval for negotiation objectives, or report back on the progress of said negotiations.

There will be no more Meaningful Vote either, so once a deal is done, Government can ratify it itself.
Regional MPs not in Government will lose the opportunity to make the voice of their community heard.

Future EU Relationship

The Queens Speech outlined a priority of a Free Trade Agreement with the EU. Government is adamant that they can finalise this by December 2020

The UK will be able to diverge in certain regulations and sign independent trade deals.

There will be a special EU summit in June 2020 for an update.

Note: There has been no recent Government economic analysis of this Agreement or future FTA.

New Brexit deadline of December 31st, 2020, a No Deal outcome still possible.

Signing an FTA will mean leaving the Customs Union and Single Market.
Business will have to complete documentation, visas and tariffs when trading with the EU. Chamber documentation list here.

VAT would also be subject to change.

It is unlikely there will be immediate short-term changes in regulatory alignment.

Leaving the European Union will present many changes to the business community and they must prepare for it. Business should be preparing for Brexit now, to get ready for the new deadline of December 31st, 2020. The Chamber has some online resources here:, and will be updating its program through the year to best support members.

The Chamber will continue to champion the most pressing issues of the North East community, especially as we navigate Brexit. For any guidance, support or more information, please contact