After 52% of voters backed leaving the EU in 2016, it’s become something of a dead cert that we’re on our way out. What’s less certain, however, is how long it’s going to take.
The uncertainty has left business owners feeling like they’re in limbo, with a number of rules and regulations left hanging in the balance. But is it necessarily bad news if it takes longer than expected?
Read on as we explore the potential advantages a long transition could have for ecommerce.
What is the “Brexit transition”?
While article 50 – signed on 29th March 2017 – sets out that the UK will leave the EU on 29th March 2019, that doesn’t mark the end of the relationship between the two. Following the end of the UK’s membership, it’s likely there will be a “transition period”, allowing both parties to continue negotiations and cement their positions post-Brexit.
In February, a leaked government document suggested that the transition could last as much as two years following March 2019. Meanwhile the EU itself has hinted that it would be open to an extension on the current timetable. In simple terms, this means the UK would be bound by EU law for as long as it takes to negotiate a deal.
Much to the annoyance to so-called “hard Brexiteers”, the UK will still be subject to European Court of Justice rulings. It will also continue its current immigration policy and will have to maintain financial contributions to the EU. And, while that might infuriate the minority of Brits still backing a “hard Brexit”, it’s actually great news for ecommerce.
The status quo
There’s an endless debate about whether EU membership has been beneficial for the UK. And, don’t worry, we’re not going to get into that. But one thing that’s far more agreeable is that it’s been hugely beneficial for ecommerce.
At present, UK companies have tariff-free trade access with EU countries and their consumers. That means free movement of goods across 27-member states, along with Switzerland, Norway, Liechtenstein and Iceland – who make up the European Free Trade Association.
As a result, exports to the EU make up almost half of the UK’s total for goods and services. Data from 2015 values those exports at over £220 billion as a whole. This international co-operation also allows those 31 countries to trade with British businesses and consumers without a tariff, which is valued at just over £291.1 billion collectively.
Extending our current package
A longer transition period simply means this will continue. In the short run, at the very least, that’s an immediate benefit to ecommerce businesses, who can continue to trade freely with a large proportion of their consumer base. Is this the best-case scenario?
Brexit advocates may argue that the same deal will be in place after the transition period. And some have even suggested that we could benefit from improved trade deals outside the EU post-Brexit. Who knows – that may well happen. But as things stand, there is no guarantee of a similar free trade agreement. With that in mind, any extension of the current system will be music to the ears of ecommerce businesses.
Prepare for any outcome
For ecommerce businesses, it makes sense to prepare for any post-Brexit situation. At Fluid Digital, we build flexible, scalable and user-friendly Magento ecommerce stores for businesses of all sizes. With a vast portfolio of impressive, attractive and – most importantly – successful sites, we’re the perfect solution to help your business grow. If you’re looking for a website you can rely on, that’s mobile-friendly and tailored to your business, be sure to contact the team today.