BREAKING NEWS
This content is not available in your region

Brexit trade talks: Key terms explained

Access to the comments Comments
euronews_icons_loading
Brexit trade talks: Key terms explained
Copyright  Copyright 2020 The Associated Press. All rights reserved   -   Kirsty Wigglesworth
Text size Aa Aa

Britain may have exited last January but “Brexit” is far from finished. Here are several terms you may have heard a lot of over the past year -- and they're not done with yet as the EU and UK struggle to agree a trade deal.

Transition period

The transition period started on February 1st and is intended to allow time for the UK and EU to agree their future relationship, including a trade deal. During this time the UK has no say in the making of new EU laws and has to follow all existing EU rules.

It’s due to last until the end of 2020.

Most arrangements between the UK and the EU remain the same as they were under Britain's membership of the bloc.

Level playing field

This is a trade policy that has a set of common rules and standards that are used to prevent businesses in one country undercutting their rivals in another, the EU are keen to do this in areas such as workers' rights and environmental protections.

Both the EU and the UK signed up to this in the Political Declaration -- a non-binding framework for future relations that was part of the divorce deal.

Canada-style deal

This is the sort of agreement that Boris Johnson wants. It's described as a thin free trade deal that would keep the UK relatively free from EU rules.

The EU’s Canada trade deal took ten years to negotiate and gets rid of most, but not all tariffs on goods traded between the EU and Canada.

It also increases quotas (that's the amount of a product that can be exported without extra charges) but does not get rid of them altogether.

And it does little for the trade in services, particularly almost nothing for financial services, which is vital for the UK economy.

Australia-style deal

Boris Johnson has also mentioned having an arrangement with the EU similar to Australia's. This is what would happen if no post-Brexit trade deal is agreed with the EU.

However, the EU doesn’t have a free trade deal with Australia.

They are in negotiations for one, but they currently operate mainly on World Trade Organisation (WTO) rules - i.e. it would simply equate to No Deal.

So what are WTO rules?

The World Trade Organisation is the place where countries negotiate the rules of international trade - there are 164 members and, if they don't have free trade agreements with each other, they trade under "WTO rules".

Every WTO member has a list of tariffs (taxes on imports of goods) and quotas (limits on the number of goods) that they apply to other countries. This could mean the UK will have fewer access to codes at higher prices.

Each member must grant the same market access to all other members – except developing countries and those that have free trade agreements.

Single Market

The EU says this is one of its greatest achievements. It allows free movement for goods, services and money throughout the bloc by getting rid of internal borders and regulatory controls.

Oh, it also means people – EU citizens – can move around freely too. As well as enjoying products from all over Europe, they can live, work, study, shop and retire anywhere in the EU (although there are conditions).

The high number of people who had moved from the continent to the UK played a huge part in the Brexit referendum.

Leaving the Single Market, as the UK will do at the end of the transition period, means the UK and the EU will operate two different systems with potentially different rules and standards – which could bring more border checks.

Cherry-picking

Britain wants to retain as much access to the Single Market as possible – but on its own terms. That's the essence of much of the trade talks.

EU leaders and many others in Europe say the UK can't have its cake and eat it – enjoy all the benefits without accepting the obligations. "If you leave the club there are consequences," European Council President Charles Michel said.

"No cherry-picking," was a favourite phrase of his predecessor Donald Tusk.

Customs Union

All EU countries follow common customs rules, including applying the same import duties, on goods coming into the bloc from outside. There is a Common Customs Tariff but checks and controls also extend to matters like health and food.

The EU sees it as essential to ensure that the Single Market functions properly as it enables goods to move freely within the bloc.

The UK's departure from the Customs Union at the end of the year will bring customs formalities and border checks.

But it also frees up the country to adopt its own trade policy – and implement its own trade deals with third countries. Though the UK will fall out of the EU's trade deals with other countries, unless it can secure new ones on similar terms.