Brexit to many is not as as simple to understànd, especially up to now when the move to withdraw has been extended twice, to which date of effectivity has extended to October 31, 2019.
Confusions About the Deal or No-Deal Brexit Conditions
Mentions about exit with or without deal upon effectivity date has been floating but remains baffling. The general understanding was that the UK was set to exit from the European Union last March 29, 2019, even if the UK and EU Council fails to arrive at a withdrawal agreement. .
Under the No-Deal scenario, the UK will engage in free trade, while businesses and people carrying on with activities in the UK, will abide by UK’s own set of laws. Yet Brexit finality remains uncertain, since extensions rather than the no-deal Brexit, has transpired.
Concerns Over a No-Deal Brexit
The crux of the matter is that if the UK goes ahead with free trade without a Brexit deal, there are apprehensions that disruptions and confusions may transpire. Disagreement may arise with regard to trading laws, border issues, tariffs, residence rights of citizens, consumer rights and protection and even over matters as simple as mobile phone charges.
Certain movements of goods and people require definitive rules. Although the UK has already set some guidelines, some EU member countries and other territories may raise issues if UK’s non-EU aligned policies adversely affect their businesses and citizens.
On the other hand, if UK goes into free trade with a Brexit deal, the withdrawal movement initially sets out within a transition period. In which case, temporary agreements are in place until unforeseen problems have been threshed out and resolved with a more permanent UK or EU policy.
Examples of Issues Clouding a No-Deal Brexit
As a rule, countries that do not have free trade deals between them have to abide by the rules set forth by the World Trade Organisation (WTO). This denotes that if the UK trades with EU member countries without a pre-agreed deal, tariffs or taxes imposed on imported goods will be based on WTO tariff rates.
A certain land border must be established in order to determine up to what point EU’s trade directives apply or do not apply as far as UK is concerned. Instead of installing custom posts, border towers and security systems, the EU and UK agreed to establish the 310-mile border separating Ireland from Northern Ireland as the the land border between the UK and EU.
In this scenario, Northern Ireland remains aligned with EU, which means UK products brought to the territory may be subject to controls and checks based on EU regulations. The establishment of the border has been referred to as “the backstop” safety net in the Brexit negotiations.
In the event the UK goes ahead with free trade, without formalising an agreement pertaining to border transactions, the “backstop” safety net stays. This denotes UK product movements in Northern Ireland will abide with EU regulations until such time that a more definitive agreement has been established.