As I am sure you will all be aware, the referendum on 23rd June 2016 decided that Britain will be leaving the European Union. Following this result, Brexit led to the resignation of David Cameron and the appointment of Theresa May as Prime-Minister. Since then, Brexit has been quite an unavoidable news story.
Here’s some terms you need to know to understand what’s happening with Brexit:
Article 50 – The Treaty of Lisbon, which amended both the TEU and TFEU, contains Article 50 which states that a ‘Member State may decide to withdraw from the Union in accordance with its own constitutional requirements […] The Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal […] The Treaties shall cease to apply to the State […] two years after the notification.’ Read more here.
The World Trade Organization (WTO) – The global rules of trade between nations. The UK may choose to rely on its WTO membership to access European markets or begin negotiating free trade agreements. Read more here.
The Customs Union – A trade agreement between two or more countries. The countries in the agreement do not impose tariffs on each other’s goods, and impose a common external tariff on countries outside the customs union. Read more here.
The Single Market – A territory without any internal borders or obstructions to the free movement of goods and services. Read more here.
The Norway Model – Norway is a full member of the Single Market, allows free movement, does not have any tariffs with the EU, and makes contributions to the EU budget. However, unlike Member States, Norway is not a part of the Customs Union.
The Switzerland Model – Switzerland is a partial member of the Single Market, allows free movement, and does not have any tariffs with EU states. However, Switzerland pays a smaller contribution to the EU budget than Norway, and is not a part of the Customs Union.
The Canadian Model – Canada is not a member of the Single Market, and instead has reduced tariffs through a free trade deal. Furthermore, Canada does not allow free movement, is not in the Customs Union, and makes no contribution to the EU budget.
The Turkey Model – Turkey is not a member of the Single Market, and specifically has no tariffs on industrial goods. Turkey is in the Customs Union, but does not allow free movement and does not contribute to the EU budget.
Soft Brexit – Britain may choose to follow a model similar to that of Norway, being a “soft” Brexit. Those who voted to remain in the referendum tend to prefer this approach. A possible outcome may involve a form of membership in the EU single market in return for a degree of free movement.
Hard Brexit – Britain may choose to become completely independent of the EU. Refuse to compromise on issues like the free movement of people, leaving the EU single market and trading with the EU as if it were any other country outside Europe, based on World Trade Organisation rules. Read more here.
Clean Brexit – Many of the “Leave” campaigners are aiming for a “clean” Brexit, within which the UK would leave both the customs union and the single market. Meanwhile “Remain” campaigners have stated that the predicted figures of a “clean” Brexit are a fantasy. Read more here.
Following the referendum:
R (Miller) v Secretary of State for Exiting the European Union judged that the Government does not have the power under the Crown’s prerogative to give notice pursuant to Article 50 for the UK to withdraw from EU. Following this judgment, the Government has appealed the decision and hearings have been held in the Supreme Court. This future decision does not affect if Britain will leave the EU, but how.
Theresa May intends to trigger Article 50 before the end of March 2017. Although she has met with several world leaders, formal negotiations have yet to start. In her meeting with Angela Merkel, the Chancellor took a firm stance saying that the UK will not have a preferential treatment concerning its possible access to the single market. Read more here.
The Effect of Brexit:
Whilst the economy is in fact expected to grow, the currency hit a three-year low against the euro during 2016. The pound has still not recovered from the result of the referendum.
Since the referendum, hate crime has also been on the rise. Although the sharp increase in these crimes slightly reduced again by August, there is still a notable difference.
Concerning migration, a record number of EU citizens have come to live in Britain, with a recent figure showing 284,000 people moving to the UK. Read more here.
Finally, Brexit will dramatically affect the work done in law firms. Legislation changes, and regulations introduced by trade deals, will be decisive when a lawyer advises a client. For instance in the commercial firms, any business client will need sound advice in order to continue to profit in the aftermath of Brexit. With formal Brexit negotiations yet to take place, it is difficult to determine whether international law firms will be able to provide practical, cross-border legal advice to clients from the UK. Perhaps some firms will move to other EU states in order to provide a better service.
Overall Brexit is currently a completely subjective topic, even though the referendum was already over 6 months ago. If you are to go to an open day at a law firm, a Brexit-related question will often be asked. No one can truly predict what changes will come over the following 5 years, so we will have to wait at least until formal negotiations begin before we can guess its long-term effect.
Written by Anna Flaherty
You might also be interested in this podcast about the EU Referendum, recorded earlier in the year.