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Summary of the main issues brought by Brexit that remain to be solved in 2023

Since the United Kingdom's exit from the European Union in 2020, the UK-EU relations have been strained. Building a new relationship has proven to be very challenging and the two blocks often disagree on trade approaches or diverge from regulatory alignment. In this context, the European Parliament Committees on International Trade (INTA), Foreign Affairs (AFET), Industry and Research (ITRE) and Fisheries (PECH) all met this week to discuss the annual report on the implementation and application of the EU-UK Trade and Cooperation Agreement. We have summarised below some of the key issues that will keep EU and UK negotiators busy in 2023 (and in the following years):


Diverging regulatory standards


MEP raised concerns regarding emerging regulatory divergences, including regarding phytosanitary requirements and New Genomic Techniques.


Great coordination would be beneficial to both the EU and the UK and would spare significant costs and administrative burden for businesses. Non-alignment could lead to the introduction of tariffs and other trade barriers, which would be detrimental to both the UK and the EU economies.


Data protection


Another topic where divergence could lead to a negative outcome concerns the standards for data protection. In the post-Brexit context, the UK adopted its own version of the General Data Protection Regulation (GDPR), but there are concerns on how data protection will withhold the same standards as in the EU. If the existing Adequacy Decision is questioned, it would create significant barriers to data transfers and have a huge impact on businesses.


Financial services


The UK is a major financial centre, and financial services are a significant part of the UK's economy. However, Brexit has led to uncertainty about the future of financial services between the UK and EU. The UK and EU are currently negotiating a Memorandum of Understanding to “normalise” the EU-UK relations in this sector, as mentioned by the European Commission during the European Parliament’s hearing. Discussions on this topic progress very slowly, and lot of uncertainty remains.


Northern Ireland


The issue of Northern Ireland has been one of the most challenging aspects of Brexit. The Good Friday Agreement, which ended decades of conflict in Northern Ireland, relied on the open border between Northern Ireland and the Republic of Ireland. However, after Brexit, this border became an external EU border, which has caused significant difficulties. The recently presented Windsor Framework brought some solutions to the deadlock but its implementation in practice will need to be closely monitored.


Fisheries


The fisheries issue has been another significant point of contention between the UK and the EU since Brexit. While the Council approved in December 2022 the EU-UK fishing deal for 2023, the agreement setting fishing opportunities is an annual process and discussions on this topic are expected to remain complex. The UK and the EU need to strike a compromise that balances the interests of their fishing industries while ensuring the sustainable management of fish stocks.



Do not hesitate to contact Ridens for more information on the topics currently under discussion between the EU and the UK and how they could impact the activities of your company/organisation.

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