13 March 2020
EU-UK trade relationship during Brexit transition
The UK left the European Union on 31st January and is now in a “transition period” which will last until 31 December 2020. It can be extended for up to two years if the EU and the UK agree, however so far the UK has indicated that it does not intend to do so.
During the transition period, the current EU-UK trade relationship will not change. This means that the UK will remain part of the EU Customs Union and Single Market and remain subject to all EU trade law. Travel to and from the EU, freedom of movement and UK-EU trade will stay the same and any EU trade regulations and directives that come into force during the transition period will also apply in the UK.
The transition period gives the EU and the UK time to negotiate a new trade deal and it also gives businesses time to prepare. It is a good idea to review your commercial contracts and (a) consider building in a Brexit clause so that if there are rule changes which are material to the performance of the contract, you have a basis on which to renegotiate when the time comes and (b) try to build flexibility into the term of any agreement, enabling you to escape if you fear the Brexit consequences could be significant for you/your business.