Brexit: Mission Impossible?

 

Blog Post
Adam McGiveron, Partner, Shakespeare Martineau 

The opening credits for the original Mission Impossible TV series started with a gunpowder fuse burning across our screens. We watched and wondered whether our heroes from Impossible Missions Force could pull off the challenge to avert disaster. The same sense of tension is now being felt with the Brexit negotiations.

The negotiations with the EU27 are not going well. As we noted at the start of negotiations in June, the EU Council and EU Parliament locked in a legally binding negotiating mandate giving Michel Barnier no capacity to talk about our future trade arrangements until “sufficient progress” has been made on the separation arrangements. The EU 27 Council meets to review progress on 20 October and is not expected to authorise the start of trade talks. At the very most they may start their own internal debate about what the talks may look like. A concluded trade agreement now looks a long way off.

Meanwhile back at home, the EU Withdrawal Bill is being delayed after 300 amendments and 54 new clauses have been proposed by MPs with concerns about the Bill. Again, a conclusion to that debate looks a long way off.

The Article 50 letter lit the fuse and the UK leaves the EU on 29 March 2019 whether or not any arrangements are in place. It will take unanimous agreement of all 28 countries to agree new arrangements and it will take unanimous agreement to create a transition or delay the exit. The prospect of a disorderly exit is looking increasingly likely.

Businesses should now be planning for a disorderly exit. In particular businesses should be looking at their exposure in relation to their workforce, their direct and indirect supply chains and their specific regulatory regimes. Businesses should also prepare their resilience to a potential financial shock.