What happens after Brexit?

The UK’s exit from the European Union depends mainly on if an agreement is reached and what that agreement will be like.

Essentially there are four possible options for the exit:
1) the European Economic Area (EEA) model;
2) a customs union between the UK and EU;
3) a bilateral agreement;
4) an abrupt exit without an agreement (so-called Hard Brexit).

The impact of the options has been assessed and analysed by various market participants, think tanks, publications etc. Brexit’s impact on various member states is different, but Estonia can be compared to other small EU countries in terms of potential economic as well as Brexit influences. RaboBank from the Netherlands has prepared a table on the consequences of the different Brexid scenarios:

Source: RaboBank 2017 (https://economics.rabobank.com/publications/2017/march/brexit-the-impact-for-dutch-business/)

Hard Brexit
At the moment there it is highly possible that Hard Brexit will occur in spring, bringing along various problems for the market participants. If the UK leaves the EU without an agreement, the WTO rules will become applicable for the EU states and the UK from 30 March 2019. For commerce it means overnight implementation of customs border, which means that imports from the UK to the EU countries must comply with the rules applicable for third countries with whom no free trade agreement has been signed. If the EU would like to give specific goods or services from the UK preferences or other exceptions, this must be extended to all WTO countries.

Reet Teder
Representative of the Estonian Chamber of Commerce and Industry at the European Economic and Social Committee