UK decision to leave the EU – Brexit

What is it all about?

The British people voted to leave the European Union ('EU') in June 2016. The formal process for the UK's exit from the EU began when the UK Government triggered Article 50 of the Treaty of Lisbon on 29 March 2017, commencing the two year process of negotiating the terms of its exit. The UK will formally leave the EU on 29 March 2019.

Australia remains fully committed to the UK as an indispensable friend and ally. We also remain fully committed to our relationship with the EU, which is equally based on shared interests and common values.

Foreign Minister Payne and Trade, Tourism and Investment Minister Birmingham regularly meet and liaise with their UK and EU counterparts, including on Brexit, and remain committed to preserving and advancing Australian interests.

Overview

What happened?

The UK held a referendum on 23 June 2016 to answer the question: "Should the UK remain a member of the EU, or leave the EU?" By a margin of 51.9 per cent to 48.1 per cent, the UK voted to leave the EU (commonly referred to as 'Brexit'). A breakdown of votes by region is listed below.

Remain Leave
England 46.6% 53.4%
Scotland 62.0% 38.0%
Wales 47.5% 52.5%
Northern Ireland 55.8% 44.2%

What is the European Union?

The EU is an economic and political partnership of 28 member countries (including the UK). It is often described as a 'single market' facilitating the free movement of goods, services, capital and people (sometimes referred to as the four freedoms) — as if member states were a single country.

The EU is also a customs union, or a group of countries with a common external tariff. The Eurozone (also referred to as the Euro area) is a monetary union of 19 of the 28 EU member states which have adopted the Euro as their currency. The UK is not a member of the Eurozone.

What does Brexit actually mean?

Article 50 of the Treaty of Lisbon provides the legislative framework to negotiate Britain's EU withdrawal. Under the Article, member states must formally notify the EU of their intent to withdraw. On 29 March 2017, the UK Government invoked Article 50, triggering a two-year period in which the UK and the EU must determine the terms of the UK's exit.

If agreement is not reached within this two-year period on the terms of the UK’s withdrawal, the UK will leave the EU with no provisions in place — unless the UK and all remaining member states agree to extend negotiations.

The UK will also need to establish the parameters of its WTO membership. The UK, like all EU member states, is currently a WTO member in its own right, but its tariff and services obligations are those of the EU.

The UK will need to create its own WTO schedules for goods and services. An early priority for Australia is to clarify our interests in revised UK and EU27 WTO tariff schedules — to maximise market access for Australian exports to both the UK and EU.

What progress has been made in negotiations between the UK and EU?

After triggering Article 50 of the Treaty of Lisbon, formal negotiations between the EU and UK commenced in June 2017.

In March 2018, the EU and UK jointly released a draft Withdrawal Agreement, detailing the progress made within negotiations to that point. The agreed elements of the draft Withdrawal Agreement included the terms of a transition period, which will see existing conditions of EU membership (including membership of the single market and customs union) continue to apply to the UK between 29 March 2019 and 31 December 2020. The draft Withdrawal Agreement also highlighted there was no agreed resolution of the border between the Republic of Ireland and Northern Ireland. The Withdrawal Agreement remains subject to ongoing negotiation.

Both the EU and UK have made public their priorities for negotiations on the future EU-UK relationship. The EU formalised its negotiating guidelines for the future relationship at its March 2018 European Council meeting. This followed UK PM May’s 2 March Mansion House speech which set out the UK’s vision for its future relationship with the EU. 

On 12 July, the UK Government released a White Paper providing more detail on its proposals for the future EU-UK relationship. The White Paper proposes an ambitious partnership covering the breadth of security interests. It also proposes that the future EU-UK economic relationship include a “common rulebook” for goods (including agri-food), committing the UK to ongoing harmonisation with EU rules necessary to provide for frictionless trade at the border. Further, a ‘facilitated customs arrangement’ would be established whereby the UK would apply UK trade policy (including tariffs) to goods destined for the UK, and EU trade policy to goods destined to the EU. These proposals remain subject to ongoing negotiation with the EU.

What is the Australian Government doing to protect Australian interests?

The Australian Government is paying close attention to the UK's exit negotiations. The Australian Government has convened a whole-of-government coordination process to assess the implications of Brexit for Australia, ensuring that any risks posed by Brexit are addressed, while also identifying opportunities to enhance our relationships with the UK and EU within existing legal frameworks.

Can Australia begin FTA negotiations with UK?

Australia and the UK are committed to negotiating an Australia-UK FTA as soon as the UK is in a position to do so.

What does Brexit mean for business?

The Australian Government is paying close attention to the UK's exit preparations.

There will be no changes to the rules covering our trade and investment interests and people-to-people ties with the UK and EU while the UK remains within the EU, or during the expected transition period.

The Government is continuing to liaise closely with the UK and the EU, to identify future implications for Australian businesses operating in, or trading with, the UK and/or Europe.

This includes contingency planning in the event that the UK leaves the EU in a ‘no deal’ scenario.

A ‘no deal’ scenario is one where the UK leaves the EU and becomes a third country at 11pm GMT on 29 March 2019 without a Withdrawal Agreement and framework for a future relationship in place between the UK and the EU.

The UK government has been implementing a significant programme of work to ensure the UK will be ready in all eventualities.

As announced by UK Prime Minister May on 18 July 2018, this includes the iterative release of a series of Technical Notices, to minimise disruption and ensure the smooth operations of business, infrastructure and public services in a ‘no deal’ scenario. 

These technical notices are available through the Department for Exiting the European Union. They include information on a range of key topics, including (but not limited to) Importing and Exporting; Product labelling and product safety; Travelling between the UK and the EU; Taxation; Regulation of medicines and medical equipment; Workplace rights; Applying for EU-funded programmes; Civil nuclear and nuclear research; Farming; Driving; and on State Aid.

The intention of this guidance is to set out information to allow businesses and individuals to understand what they would need to do in a ‘no deal’ scenario.

The European Commission and the EU Member States also continue work on preparedness for the consequences of the UK’s withdrawal, taking into account all possible outcomes. The EU publications are available at Preparedness Notices and set out the consequences of the withdrawal of the UK from the European Union without a formal, ratified agreement.

As a result, Australian businesses and individuals should consider how a ‘no deal’ scenario could affect them, and may want to begin taking steps to mitigate against such a risk, however unlikely.

As part of considering the potential impacts, businesses should take account of the volume of their trade with the UK and the EU and any potential supply chain impacts. Businesses should begin to look at the guidance for importing to and exporting from the UK and the EU and to familiarise themselves with key processes. Individuals should also consider how a ‘no deal’ scenario could affect them, in regard to residency, education and employment, depending on their circumstances.

Australian businesses and individuals should consider whether it is appropriate for them to acquire legal advice and/or engage a migration agent, customs broker, freight forwarder or logistics provider, to support them in preparing for all eventualities, including ‘no deal’.

Are there any implications for Australians seeking to live and work in the UK?

The UK Government has made clear its intention to retake control over its immigration policy when it departs the EU.

Australian ministers have impressed upon their UK counterparts the importance of ensuring any prospective visa changes do not negatively impact the strong economic and people-to-people links between Australia and the UK.

Will dual nationals with Australian and British passports still be able to live and work in the EU?

Nothing will change in the short term for British passport-holders living, working, and travelling in the EU. This includes Anglo-Australian dual nationals. Whether this state of affairs will continue in the future will depend upon the outcome of negotiations between the UK and the EU.

As a result, Australian individuals should consider how a 'no deal' scenario could affect them personally, and  may want to begin taking steps to mitigate against risks, however unlikely. Australian citizens should begin to look at the guidance issued by the UK (available through the Department for Exiting the European Union) and the EU in relation to a range of issues which could affect them in regard to residency, travel, education and employment, depending on their circumstances.

These include (but not limited to) modes of travel between the UK and the EU, including by air, sea, rail, coach and/or car; travel between the UK and Ireland; changes to airport security; passports and visas; drivers licences and international driving permits; vehicle insurance; pets and horses; mobile phone contracts and mobile roaming;  importing and exporting; VAT; banking and other financial services; and family law and other civil law issues.

The EU and UK will continue to periodically issue further guidance in relation to Brexit. Australians should consider signing up to email notification services to keep updated on issues directly relevant to them.

Australian individuals should contact their service provider directly to ascertain if and when there will be changes to contracts and/or consumer services provided as a result of Brexit. Australians should also consider whether it is appropriate for them to acquire legal advice and/or engage a migration agent, insurance broker, or other type of consultant to support them in preparing for all eventualities, including 'no deal'.

Has the UK's decision to leave the EU impacted Australia-EU trade negotiations?

No. Australia and the EU launched FTA negotiations on 18 June 2018. As a bloc, the EU is Australia's second largest trading partner, third largest export destination, and second largest services market. The EU was Australia's largest source of foreign investment in 2017. Australia is seeking an ambitious and comprehensive FTA with the EU to drive Australian exports, economic growth and job creation.

Further information on the Australia-EU FTA negotiations

Updates

DFAT will continue to update this webpage as further information is provided by the UK government and the European Commission. The material on this website is a summary only of the subject matter covered and does not necessarily reflect the views of the Australian Government or DFAT. It is not intended to be, nor should it be relied on, as a substitute for legal or other professional advice. Users should obtain any appropriate professional advice relevant to their particular circumstances.

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Infographic. View a larger version [JPG]. Contact a-eufta@dfat.gov.au for accessible text version.
Last Updated: 26 October 2018

 

 

Contact us

EU trade-related submission can be submitted to the addresses listed below.

Email: a-eufta@dfat.gov.au

Mail:
Australia-European Union Free Trade Agreement
Europe Division
Department of Foreign Affairs and Trade
RG Casey Building
John McEwen Crescent
Barton ACT 0221