18 Oct

ABCC Brexit Update - Boris Johnson Clinches Brexit Deal - 18 October 2019

  • With hours remaining before EU leaders were scheduled to meet in Brussels, UK PM Boris Johnson and EU Commission President Jean-Claude Juncker announced that after intense negotiations, a Brexit deal has been struck.
  • In a tweet, PM Johnson called upon the House of Commons to now back his ‘great new deal’ in a vote this Saturday, 19 October.
  • The Withdrawal Agreement removes PM May’s ‘Northern Irish Backstop’.  In its place, whilst Northern Ireland will remain in the UK’s customs territory, it will follow EU customs and single market rules and regulations for goods.  This arrangement avoids the need for a hard border between the Republic of Ireland and Northern Ireland but requires EU customs checks across the Irish Sea, between Great Britain and Northern Ireland.
  • Furthermore, both sides agreed that after four years of the agreement being in force, the Northern Irish Assembly will be given the opportunity to give its consent on the deal’s continuation.  Crucially, only a simple majority is required to continue the regime - something which effectively rules out the possibility of a veto by the Democratic Unionist Party (DUP).  
  • The full amended Withdrawal Agreement can be found here.  
  • The rest of the Withdrawal Agreement, including the UK’s financial obligations to the EU and protections for citizen rights, remain largely unchanged from the deal originally struck by PM Theresa May.
  • The DUP, which has provided ‘confidence and supply’ to the ruling Conservative Party in Westminster, has already rejected Johnson’s deal.  Nigel Dodds, the party’s leader in Westminster, announced his 10 MPs will vote against the deal in the 19 October Commons vote.
  • Without the DUP’s support, Downing Street has already started intense whipping of Conservative MPs, including members of the European Research Group (ERG) of hardline Brexiteers and is holding discussions with the 23 former Conservative MPs who now sit as independents.  There is speculation that Johnson could restore the whip to the 21 MPs who were kicked out of the party in September for having supported the Benn Bill (which requires PM Johnson to request a Brexit extension to 31 January 2020 if he is unable to pass his Brexit Deal through the House of Commons on 19 October).
  • Downing Street is also holding discussions with Labour Party MPs in Leave constituencies, many of whom want to respect their electorate’s decision in the referendum but are concerned about the protection of workers and the environment, post-Brexit.  
  • Along with the Scottish National Party (SNP) and the Liberal Democrats, Shadow Brexit Secretary Sir Keir Starmer said the Labour Party would oppose the deal on Saturday.  
  • Separately, the UK and EU agreed a revised Political Declaration, setting out intentions for a future UK/EU relationship after Brexit.  The Declaration “establishes the parameters of an ambitious, broad, deep and flexible partnership across trade and economic cooperation with a comprehensive and balanced Free Trade Agreement at its core, law enforcement and criminal justice, foreign policy, security and defence and wider areas of cooperation.”
  • The Political Declaration can be found here
  • Saturday’s vote in the House of Commons will be the last opportunity for PM Johnson to ensure that the UK leaves the EU on October 31.  Without parliamentary approval, Johnson will be required to request a Brexit extension from the EU to 31 January under the terms of the Benn Bill - something which he has pledged not to do.
  • In a boost to PM Johnson, EU Commission President Juncker said there was no need for a Brexit extension as “we have a deal.”  However, European Council President Donald Tusk later said that he would ‘consult’ EU member states if an extension proves necessary.
  • Following the announcement that a deal had been struck, the Pound rose to US$1.29 - the highest since May.  It later dropped, however, following the DUP’s announcement that the party would not support Johnson’s Deal.

The ABCC and Brexit

The ABCC will continue to follow these developments closely. We look forward to keeping members up to date with the very latest from London and what it possibly means for the Australian-British business community.  Earlier ABCC Brexit updates can be found on the ABCC Blog.

If you would like to receive more frequent Brexit updates or have any questions, please feel free to contact our office on abcc@britishchamber.com.

By Paul O'Hagan, General Manager, Victoria, South Australia & Western Australia

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