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Brexit and our Customers

October 21st, 2019

Brexit and our Customers

Brexit and our Customers

Article Author: Martin Ludlow, In-House Bassoon Specialist and Director at Double Reed Ltd.

Brexit and our Customers – Update 21 October 2019

As the path of Brexit enters ever-more-tangled thickets of confusion and complexity, we thought our EU customers (and anyone else bemused by the situation) would benefit from our understanding of the current situation.

The likelihood of a no-deal Brexit on 31 October is now vanishingly small

With a deal agreed between the EU and the UK government, and the UK Prime Minister having sent his letter to the EU on Saturday asking for an extension (to be triggered if the deal has not passed into UK law by 31 October), it is now very difficult to envisage a scenario where the UK will leave the EU on 31 October without a deal.

For that to happen the EU would have to decline to agree an extension. The EU has never shown any willingness to trigger a no-deal Brexit if there is at least some prospect of a deal being attained.

The likelihood of the current EU-UK deal being implemented at some point in the next few months has increased

If there is a continued impasse in the UK’s House of Commons such that the legislation for the deal cannot be passed by 31 October, the chances of a General Election in the next few months is high. The Conservative party is committed solidly to the current EU-UK deal, and current opinion polls show that the party is likely to win an overall majority at an election. Therefore the deal is very likely to be passed after a General Election if it cannot be passed before.

Carry on as we were (at least until the end of 2020)

Once the UK leaves the EU with a deal, the “transition period” follows. This is a period of time in which the UK continues to be part of the single market and customs union, and means that there will be no changes to trade or freedom of movement while it lasts. 

This period lasts until 31 December 2020 under the current agreement, but it is possible to extend it to a maximum of four years under EU rules. As the aim of the transition period is to allow time for a new trade agreement to be negotiated – and these normally take many years to agree - there is a serious possibility that the transition period will be extended regardless of what the UK government currently say.

In summary, in terms of our EU customers’ relationship with us, nothing will change until at least the end of 2020, so we can continue to supply bassoons and accessories without disruption and with no additional cost or extra administration.

If there is a risk that the above is wrong, the risk is that events turn towards the UK remaining in the EU rather than leaving without a deal - which, for us and our EU customers, is no risk at all.

Article Author: Martin Ludlow, In-House Bassoon Specialist and Director at Double Reed Ltd.