There is now a transition period until the end of 2020 while the EU and UK negotiate new post-brexit partnership.
The current rules on trade, travel, and business for the EU and UK will continue to apply during the transition period.
We provide answers to the most frequently asked questions (regularly updated in accordance with political developments).
On 31st January 2020 the UK has left the EU after both sides ratified the withdrawal agreement. Until the end of 2020 we are in a transitional period which provides time for both sides to negotiate new post-brexit partnership. During the transitional period, UK is still treated as a Member State bound by EU law yet without direct participation in EU institutions and on decision-making.
Both sides are currently preparing for the launch of negotiation on future partnership. Their priorities will be defined in negotiating mandates. European Commission published its draft mandate on 3rd February (here) and Council of EU approved its final version on 25th February 2020.
During the transitional period, nothing changes for businesses. They can continue to rely on the same rules as before 31st January. The transitional period ends at the end of 2020, unless it is extended. After 1st January 2021 thus companies need to prepare for changes. Either they will follow rules of a preferential agreement that also covers trade, or the standard of trade will be regulated by WTO minimal standard.
Trading under an FTA provides for a preferential regime of trade between two parties. Unlike the WTO regime, it usually provides for zero tariffs on the condition of fulfilling rules of origin, liberalization of trade in services, better access to public procurement market or higher standard of intellectual protection rules. On the other hand, an FTA compared to internal market and customs union definitely means more trade barriers rising from regulatory differences or obligatory customs procedures.
What conditions will be applicable as of 1st January 2021 will be clear probably during autumn 2020.