Tech Nation

The Brexit White Paper: What you need to know

government

Maria PalmieriMaria Palmieri, July 20, 2018

Last week the government issued its Brexit White Paper, which sets out the UK’s mission to deliver a new economic and security partnership with the EU. While it’s more of a framework than a detailed plan, it’s very much a soft approach to departing the EU. These kind of things can be a little tricky to disseminate, so we’ve done some of the leg work for you. Here’s what you need to know.

The White Post-It; a summary

  • Goods – Free Trade Area and Facilitated Customs Arrangement. Arrangement allowing the UK to make offers to third country trading partners according to WTO rules
  • Services & Investment – New arrangements that provides regulatory flexibility;
  • End of free movement of people – Replaced by a new framework enabling UK and EU citizens guarantees on:
    • visa-free travel to each other’s countries
    • businesses and professionals to provide services
    • helping students and young people to enjoy the opportunities of both the UK and the EU
  • Digital Single Market – Replaced by new digital relationship, with free-flow of data, and sharing of cyber threat information
  • Digital Trade & E-commerce – New arrangement on cross-boarder data flows, and secure, open and free internet
  • Digital Technology – Promotion of new technologies (inc. AI) and regulatory cooperation
  • Competition – A common rulebook for state aid and competition;
  • Cooperation – Socio-economic cooperation in areas including energy, transport and civil judicial cooperation

NB. It does fit on a post-it..

Now for a bit more detail.

Goods

The UK will be leaving the Single Market and the Customs Union. In its place, the Government has proposed a Free Trade Area for goods through the phased introduction of a Facilitated Customs Arrangement. This would include the elimination of tariffs quotas and routine requirements for rules of origin for goods traded between the UK and the EU, as well a common rulebook for manufactured goods, as well as agriculture, food and fisheries products. The Government is puts forward participation in EU agencies that facilitate goods being placed on the EU market including the European Medicines Agency (EMA), the European Chemicals Agency (ECHA) and the European Aviation Safety Agency (EASA).

Services and Investment

The government is proposing new arrangement for services and digital that would provide regulatory flexibility. The new arrangement would include a system for the mutual recognition of professional qualifications, enabling professionals to provide services across the UK and EU. Additionally the government proposes a new economic and regulatory arrangement for financial services – the UK will no longer operate under the EU’s “passporting” regime, which means a new economic and regulatory arrangement based on the principle of autonomy for each party over decisions regarding access to its market.

Ending free movement of people

Free movement of people will be ending and in its place a new framework is proposed, enabling UK and EU citizens guarantees on:

  • visa-free travel to each other’s countries
  • businesses and professionals to provide services
  • helping students and young people to enjoy the opportunities of both the UK and the EU

Reciprocal provisions on intra-corporate transfers, has also been suggested, which will allow UK and EU-based companies to train staff, move them between offices and plants and to deploy expertise (based on existing arrangements with non-EU countries). This will be similar system that applies to Canadians and Australians and linked to FTAs, however, how this will work in practice is not yet known.

Digital Single Market

While the UK will not be a part of the EU’s Digital Single Market, the UK wants to develop an ambitious policy on digital trade with the EU, as well as globally. The UK therefore proposes a digital relationship that covers: digital trade and e-commerce; telecommunications and digital infrastructure; digital technology; and broadcasting.

The UK also proposes arrangements to ensure the continued free flows of personal data between the UK and the EU, which goes beyond the EU’s adequacy framework. The government is seeking a joint commitment to an open and liberalised electronic communications sector and continued sharing of cyber threat information to ensure the UK’s and the EU’s infrastructure is robust, resilient and able to adapt to evolving threats online or to digital infrastructure.

Digital Trade and E-commerce

On digital trade and e-commerce, the government want to ensure cross-border data flows, providing for the removal and prevention of barriers to the flow of data across borders. There is a desire to protect the free, open and secure internet, working with EU partners to lead the global effort to ensure that the internet is safe and open; and recognise equivalent forms of electronic ID and authentication, ensuring that these are secure, trustworthy and easy to use across borders.

Digital Technology

The UK believes that trade should promote the development of new technologies, such as artificial intelligence (AI), and notes that they are vulnerable to non-tariff barriers and proposes new models for regulatory cooperation between the UK and the EU.

Competition

On competition, the UK’s proposals include committing to a common rulebook on state aid, maintaining current antitrust prohibitions and the merger control system with rigorous UK enforcement of competition law alongside strong cooperation with EU authorities; committing to high regulatory environmental standards through a non-regression requirement; maintaining high standards on climate change; committing to high levels of social and employment protections through a non-regression requirement for domestic labour standards; and committing to high levels of consumer protection.

What people are saying

techUK say:

“This White Paper is a step forward but many questions remain. With just 260 days left until the UK leaves the European Union there is still a lack of clarity on many areas of importance for the tech sector. For those providing digital services far more detail is needed to assess the future impact on their businesses.”

The CBI say:

“The Brexit White Paper reflects much of the evidence that business has been highlighting since the Referendum. This direction is welcome – protecting jobs and investment now and in future should be the guiding star for both sets of negotiators.”

Tech Nation say:

“What’s good about this White Paper is that it recognises the importance of technology, science and innovation in helping to build the industries of the future and create jobs and prosperity.

We think entrepreneurs will welcome the commitment to the free flow of data across borders, the ability to move people in business from one country to another without a visa under a labour mobility scheme, and the government’s recognition that we will want to work in partnership with the EU over emerging technology like Artificial Intelligence. 

Soon, though, tech businesses large and small will want to see the detail of the plan. We are yet to see real insight into the tariffs e-commerce businesses might face, and so far there’s no detail on how the labour mobility scheme might work – will it be something that just suits the Googles and Facebooks, rather than the startups that are necessary to keep the sector growing? 2017 was a great year for the UK digital tech sector when it attracted £4.46bn of venture capital investment. Achieving certainty over future trading arrangements for digital services, as soon as possible, will help to maintain this momentum.”