BREXIT: International Trade Implications
On June 23rd, 2016, United Kingdom (UK) citizens voted to leave the European Union (commonly known as BREXIT), consequently UK informed this situation to the European Council on March 29, 2017.
As a relationship of more than four decades was put to an end, several meetings took place in order to give legal certainty of what would happen after leaving the EU.
In this sense, “The EU and UK withdrawal agreement” (the Withdrawal Agreement) establishes the terms of UK's withdrawal from the EU on preliminary provisions and rights of citizens, as well as other issues related to separation, such as the fate of products placed on the market before the withdrawal date and the establishment of a transition period.
UK requested an extension for the BREXIT in order to have enough time to redefine and negotiate the new terms of its relationship with the EU. Consequently, the date of BREXIT was changed to January 31st, 2020.
Since February 2nd, UK officially left the EU, nevertheless in the Withdrawal Agreement was established a transition period where the citizens, consumers, businesses, investors, students and researchers does not suffer any change, in other words, the UK benefits and rights still current.
During the aforementioned transition period from February 1st to December 31st, the commercial relationship between Mexico and UK still works for the preferential treatment that the Member States of the EU enjoy, so the importers that carry out imports originating from the United Kingdom may continue to benefit from the tariff preferences established in the Free Trade Agreement between Mexico and the European Union, and in the same way, imports from Mexico to the United Kingdom, may enjoy tariff preferences.
It is important to mention that the transition period ends on December 31, 2020.
Please bear in mind that a Mexico-UK Free Trade Agreement (FTA) is under negotiation, but until today, there is no certainty about when it will be in force. In this sense, it is recommended that companies that import and/or export products from or to the UK, evaluate the BREXIT impact in their commercial operations and evaluate alternative scenarios.
Our Firm, through its International Trade and Customs practice, will be glad to assist you with any questions related to this, as well as in any other related matter.