Matheson Brexit Webinar: The Future EU-UK Trade Relationship - An Irish Perspective
The webinar took place at a timely juncture, on the same day as the High Level Meeting at which UK Prime Minister, Boris Johnson, met with the President of the European Council, Charles Michel, the President of the European Commission, Ursula von der Leyen, and the President of the European Parliament, David Sassoli via video conference, to take stock of progress to date of the EU-UK negotiations with the aim of agreeing actions to move forward.
The key issues discussed by Tara Doyle with the panel included:
the timelines and deadlines underpinning the current trade negotiations between the EU and the UK;
the decreasing prospect of an extension to the transition period;
the likelihood of, and logistics for, a deal to be concluded in time;
the potential landing ground for a deal;
the prospects of a no-deal;
the potential impact of Brexit on the Irish supply chain and associated issues;
the implementation of the Withdrawal Agreement including the NI protocol; and
business planning and preparedness as the clock runs down to 1 January 2021.
Commenting on the remaining prospects for the 31 December Brexit transition deadline being extended at this stage of the negotiations, Mairead McGuinness noted that while there are no certainties in politics, it would seem clear now that it is unlikely that the UK Government will seek to extend the transition period past 31 December. She reflected that, while the COVID-19 pandemic had impacted negotiations, the recent announcement of the dates agreed for the upcoming negotiating rounds in July and August 2020, and the additional meetings of the chief negotiators and specialised sessions to intensify the talks which have been announced, will be crucial if a deal is to be reached.
Looking at Brexit preparedness for a no-deal scenario, Ms McGuinness pointed to the Irish Government’s development of a second Omnibus Bill to address the potential consequences of a no-deal Brexit and the European Commission’s Readiness Notices. In terms of the prospect of a Brexit deal being achieved within the time still available for negotiation, she noted that should this be achieved, it would also result in deep changes which should be factored into business planning for 1 January 2021.
On COVID-19, Ms McGuinness reflected on the continuing weight upon the business sector in dealing with the challenges arising from the COVID-19 pandemic, in addition to preparing for the end of the transition period, with or without a deal on the future relationship.
Regarding his views on business impacts, Frank Gleeson said that over the course of the Brexit negotiations, businesses had been faced with a no-deal Brexit on two separate occasions and needed to again factor a no-deal scenario into their planning for the ending of the transition period on 31 December 2020. Mr Gleeson also noted that even if a deal was agreed, Brexit would bring changes for businesses in terms of administration and operations so it is crucial that they are ready, focusing on what will impact their businesses and supply chains, and fundamentally understanding where the potential vulnerabilities lie.
With respect to how Irish businesses might be expected to pivot in terms of preparing for 1 January 2021 in light of recent developments, Liam Flynn discussed the need for businesses to review and refresh their Brexit plans to ensure that these are up to date and that there are clear steps for making those plans operational. In terms of revisiting assumptions underlying existing Brexit plans, he highlighted that it cannot now be assumed that there will be anything more than perhaps a limited Brexit deal or, in a worst case scenario, a no-deal Brexit, from 1 January. In terms of preparations and readiness, Mr Flynn also spoke about the forthcoming Irish Omnibus Bill; and the revisions to the European Commission’s sector-specific readiness notices to assist businesses and industry sectors in their preparations.
Summarising some of the key points addressed during the session in his concluding remarks, Matheson Managing Partner, Michael Jackson, referred to the continuing impacts of the COVID-19 environment for businesses alongside Brexit considerations. Mr Jackson commented that while the best outcome to be hoped for from the trade negotiations continues to be a full deal, given the time that is left the outcome which may be most realistically hoped for at this stage would be for a limited trade deal to be agreed; however he cautioned that, given the relative lack of progress in the most recent rounds of negotiations, preparations for a no-deal scenario were advisable. As it appeared increasingly likely that there will not be an extended transition period beyond 1 January 2021, Mr Jackson emphasised the importance for businesses to use the period of time which is left to revisit their Brexit plans, and in particular to ensure the ability to move quickly from a readiness or planning stage to activation and implementation by focusing on operational detail. He also noted that Matheson’s experience is that the majority of clients would prefer the certainty of a deal and expressed the hope that both sides in the negotiations could resolve outstanding differences in a pragmatic way.
Following on from the webinar, in terms of her sectoral insight, Tara Doyle observed that while financial services firms can correctly be regarded as having been early movers in their preparations for Brexit, in view of recent developments - and the way in which Brexit is evolving - it would be advisable for clients in this sector to use what remains of the transition period to now review and test the implementation of the solutions which they may have planned for in the earlier stages of the Brexit cycle.
The video recording of this webinar has now been made available. Should you wish to view it, it is available from the Matheson Client Learning Hub, here. If you do not have access to the Matheson Client Learning Hub, please contact Finbarr Geaney, Head of Knowledge Management at Matheson, with your request to access our learning resources, here.
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