Brexit Aftermath: What to Expect on January 1, 2021

The transition period following the Brexit vote has come to an end, marking a significant shift in the UK's relationship with the European Union. This article delves into the ongoing negotiations, trade agreements, and potential impacts on various sectors.

Further Rounds of Talks

Despite the end of the transition period, further negotiations are anticipated to keep the relationship between the UK and EU on track. Key areas of discussion include the Brexit Northern Ireland Protocol, which will continue to be a central issue. Further votes in the Northern Ireland Assembly in 2024 will determine the future course of talks, with outcomes potentially leading to further discussions by 2028, 2032, 2026, 2030, and 2034.

The UK-EU Trade and Cooperation Agreement (TCA) will also undergo periodic reviews, with the first scheduled for 2026 and the second in 2031. Additional talks on fish and fisheries management will commence on July 1, 2026. The agreement includes a commitment to further discussions on financial equivalence and data adequacy throughout 2021, as well as energy interconnections and professional qualifications moving forward.

The Agreement’s Joint Partnership Council and its supporting committees will continue to oversee these talks, ensuring transparency and a structured approach to negotiations between the UK and EU.

Swiss Federal Government as a Model

For insights on the potential future direction of UK-EU talks, one can look to the Swiss federal government. Like the UK, Switzerland has an agreement with the EU that maintains a good level of cooperation without full membership. This example provides a framework for ongoing discussions, offering both benefits and limitations to consider.

Domestic Implications

On a domestic level, the impact of Brexit will significantly alter how the UK trades and operates. The UK will have to navigate the aftermath of losing billions in annual funding, including from the EU. Publicly, there is a plan to continue trading with the rest of the world, especially the EU and the United States. However, this shift will require significant adjustments in policy.

Furthermore, the UK will no longer receive the billions of pounds it previously got from the EU. The EU, on the other hand, will be without the UK, which makes it necessary for the UK to find alternative trade partners.

Re-Establishment of Trade Links

The Port of Rotterdam in the Netherlands is a key player in this new landscape. Its proposal to pay the UK to semi-rejoin the internal market and continue receiving contributions to the National Health Service (NHS) represents a pragmatic solution. This model has several advantages:

It offers a win-win scenario where the UK can re-establish close trade links while the NHS continues to receive funding. The cost of repatriating workers, estimated at a fraction of the trade deficit in goods, is significantly lower than paying for more expensive third-country trade. This arrangement will likely be acceptable to both parties, given the mutual benefits.

Additionally, the Rotterdam fleet of privately owned ships will facilitate the transport of EU citizens currently living in the UK back to their home countries, addressing concerns of repatriation costs.

Alternate Scenarios

While the above scenario seems promising, it is not the only possibility. The EU may be occupied with dealing with the ongoing challenges of dealing with the COVID-19 pandemic. This could result in less attention being paid to the UK's situation, and thus fewer resources being dedicated to resolving Brexit issues.

In conclusion, January 1, 2021, marks a new chapter in the UK's relationship with the EU. The future is uncertain but the UK and EU will need to work collaboratively to navigate the challenges ahead.