We’ve put together this brief glossary to help explain, in very basic terms, some of the phrases being used with the UK’s decision to withdraw from the EU. If there’s a term you think we should add please do let us know. We also have a film here (http://www.corderycompliance.com/brexit-and-compliance-video-update/) explaining some of these issues.
Article 50 = This is the provision of the (EU) Lisbon Treaty which allows an EU Member State to decide to withdraw from the EU, which it must do by notifying the European Council of its intention to do so. Now that Article 50 has been triggered the EU and the UK must negotiate and conclude an agreement that sets out the arrangements for the UK’s withdrawal, taking account of a framework for a future relationship between the UK and the EU. The various EU treaties will cease to apply to the UK from the date of entry into force of the withdrawal agreement or, failing that, two years from when Article 50 was triggered unless the European Council, in agreement with the UK, unanimously decides to extend this period. Article 50 was triggered on 29 March 2017 and officially the UK will leave the EU at 11:00pm on Friday 29 March 2019.
Customs Union = This is a territory within which (generally-speaking) there are no internal barriers to the free movement of goods and where a single set of rules applies to goods entering into the territory from the outside. The European Economic Community (now the EU) set up a customs union for its members under which no customs duties are levied on goods circulating within the customs union – a common external tariff is imposed on all goods entering the customs union, and, there is an external trade policy. The EU is more than just a customs union though as it includes other things, including a Single Market. The EU also has a separate customs union with Turkey (which doesn’t include agricultural goods).
EEA = The European Economic Area is a free trade area whose members are the EU countries and the EFTA countries. EFTA countries who are party to the EEA Agreement participate in the EU’s Single Market, but without being members of the EU. They adopt most EU Single Market legislation (but agriculture and fisheries are excluded). Switzerland, an EFTA member, is not party to the EEA, but instead takes part in the EU Single Market through bilateral arrangements with the EU.
EFTA = The European Free Trade Association is an intergovernmental trade organisation and free trade area comprising Iceland, Liechtenstein, Norway and Switzerland. The first three of these take part in the EU’s Single Market through the European Economic Area (Switzerland has its own bilateral arrangement with the EU in this regard).
Free Trade Agreement = Generally-speaking participants sign up to a free trade agreement in order to take part in a free trade area the main aims of which are to reduce trade barriers and to increase trade in goods and services between them.
GRB = The so-called Great Repeal Bill (GRB) is in effect the legal mechanism by which the UK will transition from existing EU laws to domestic UK law. GRB will repeal the European Communities Act 1972, it will convert EU law into UK law as its stands at the moment of the UK’s withdrawal from the EU wherever practical, and, delegate powers to the UK government to make secondary legislation that will ‘correct’ any errors as part of this process.
Single Market = The EU Single Market is a single territory comprised of all the EU Member States without any internal borders or other regulatory obstacles to the free movement of goods and services, and is considered as one of the EU’s principal achievements. The UK will want to continue to have access to the Single Market, under whatever arrangement the UK and the EU finally arrive at for future dealings with each other.
Tariff = This is essentially a tax on imports or exports, which are typically seen as distorting free trade.
WTO = The World Trade Organisation is the successor of the General Agreement on Tariffs and Trade (GATT) and is an intergovernmental organisation which regulates international trade. All the EU Member States belong to the WTO and the European Commission is mandated by them to represent them collectively (as the EU) in international trade negotiations. If the Article 50 exit agreement process is not achieved within the two-year set period (and that period is not extended) and the UK has to leave the EU with no exit agreement in place, then trade rules would default to WTO rules – as a consequence the UK and the EU would have to apply tariffs to each other’s goods along with other trade restrictions.
For more information
You can also find our alerts on other Brexit topics here (http://www.corderycompliance.com/?s=brexit). We also have a Brexit Newswire. If you are interested in our Brexit Newswire please email André Bywater on the address below.
For more information please contact André Bywater or Jonathan Armstrong who are lawyers with Cordery in London where their focus is on compliance issues.
Office: +44 (0)207 075 1785
Office: +44 (0)207 075 1784