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A Brexit-inspired mural by anonymous British street artist Banksy depicting the European flag in Dover, UK. Photo: EPA
WorldEurope

Brexit is finally happening, but what does that mean? And what happens next?

  • Three and a half years after the UK voted to leave the European Union, a withdrawal agreement is finally coming into force
  • But much is still left to be decided before an 11-month ‘transition period’ ends, and the country’s future is far from certain
Brexit
Stuart Lau
Stuart Lau
Why you can trust SCMP
Saturday marks the first day of Britain’s long-expected exit from the European Union, a historic moment for which Prime Minister Boris Johnson – a key ‘leave’ campaigner during the 2016 Brexit referendum – will be remembered, positively or otherwise.
Three and a half years after the close-fought vote, the country’s 66 million citizens remain divided, with many having claimed an Irish passport in order to “stay” in the EU. Businesses fear the potential of time-consuming checks on goods crossing in and out of Europe and the Bank of England has further downgraded its forecasts for the UK economy to levels not seen since the second world war.
Graphic showing the road ahead for Britain and the EU

But Downing Street is sounding a more positive note. In a speech to be delivered an hour before the official departure time of 11pm on Friday – midnight in Brussels – Johnson is expected to pronounce “the dawn of a new era” as Britain ends almost half a century of EU membership. He will describe severing ties with the other 27 member nations as “a moment of real national renewal and change” that “is the moment when we begin to unite and level up”, according to a preview of the speech seen by the BBC.

Meanwhile, the Brexit Party’s Nigel Farage, who staged a dramatic walkout of the European Parliament in Brussels earlier this week, is said to be planning a party in Central London to celebrate the UK’s withdrawal agreement officially entering into force as a legally binding international treaty.
Nigel Farage, centre, leader of the Brexit Party. Photo: EPA
Brexit was originally scheduled for March 31 last year, but was repeatedly delayed after MPs rejected a previous withdrawal agreement reached between the EU and former British Prime Minister Theresa May. Johnson was able to get his own deal through parliament after securing a House of Commons majority of 78 in a snap election called in December on a pledge to “get Brexit done”.

As leader of the only country to have ever voluntarily quit the EU, Johnson’s priority now will be to hammer out an agreement with the bloc on trade and other issues – such as security, energy, transport links, fishing rights and data flow – by the end of this year.

Whether 11 months is enough time for the two sides to figure out their economic future together is part of the ongoing debate between London and Brussels.

Johnson maintains that it is possible to secure a “zero tariff, zero quota” trade deal in that time and has vowed not to extend the so-called transition period – when most EU laws will continue to be in force and the UK will remain in the single market and customs union, but no longer have any voting rights – beyond 2020.

But according to Ursula von der Leyen, head of the European Commission, it is “basically impossible” to negotiate a comprehensive deal on the pair’s future relationship and have it ratified by the end of the year.

If the two sides fail to reach an agreement, the legal default will be a potentially crippling no-deal Brexit whereby trade between Britain and the EU after 2021 will have to be done on World Trade Organisation terms, which would mean the imposition of tariffs and other controls.

“At best, the EU and UK are on course to conclude a free-trade agreement that removes all tariffs and quotas, but creates significant new administrative and regulatory barriers to trade in both goods and services,” said Sam Lowe, a senior research fellow at the Centre for European Reform think tank in London.

At the core of the debate is whether Britain can accept alignment with EU rules and regulations – something that Downing Street fears would not only disappoint hardline Brexiters, but could also derail future trade talks with Washington.

Britain’s Prime Minister Boris Johnson, right, receives US Secretary of State Mike Pompeo at Downing Street on Thursday. Photo: EPA
US President Donald Trump – who was propelled to the presidency the same year as the Brexit referendum on the back of his own sweeping populist “America First” movement – has promised a “massive” trade deal to support the UK’s exit. But the two countries – bound by a “special relationship” dating back decades – have been at odds when it comes to certain policies, such as a digital services tax that London is planning but Washington says will hurt US tech companies.
Johnson’s government has snubbed US calls for a blanket ban on Chinese tech giant Huawei’s involvement in British 5G networks, but US Secretary of State Mike Pompeo still talked highly of UK-US ties in London on Thursday, saying they had “a historic relationship” and when it came to trade deals, Britain would be “at the front of the line”.

The UK also wants a trade deal with China, but experts caution this could take longer. A source described preliminary discussions that have already taken place at the UK embassy in Beijing to be going at “a slow pace”.
“Increasing trade with China will definitely be an important goal for the UK after Brexit, given China’s economic importance,” said Pieter Cleppe, head of the Brussels office of Open Europe, a UK-based policy think tank. “In any case, Britain’s first preoccupation will be to safeguard the trade access the EU negotiated to the rest of the world, before it can focus its attention on convincing the likes of the US, India, Israel, and China.”
Freshly minted ‘Brexit coins’ bearing the inscription 'Peace, prosperity and friendship with all nations' and the date the UK leaves the EU. Photo: AP

Coincidentally, China was the focus of one of the very last joint UK-EU initiatives to take place before Brexit day: a chartered evacuation flight carrying hundreds of British and other EU citizens out of Wuhan that left at 9.45am local time on Friday.

By the time it lands in England, Britain will be well on its way out of Europe – and as the plane’s passengers breathe a sigh of relief to be out of the city at the centre of a deadly coronavirus outbreak, so too will legions of Brexit-weary Britons welcome their country finally taking its next steps into the future, however uncertain that future may be.

Additional reporting by Reuters

This article appeared in the South China Morning Post print edition as: Brexit NOW done, done, now for the difficult part begins
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