In what’s considered to be the biggest political shake-up in decades, Britain last year voted to formally cut its long relationship with the European Union (EU).
Colloquially known as Brexit – a shorthand term that merges ‘Britain’ and ‘exit’ – it’s a move that’s fuelled ongoing debate and countless news headlines.
While the UK and EU’s politicians and public prepare for the long-goodbye (which gives both sides two years to agree to the terms of the split), divided opinion and uncertainty remains.
At a recent seminar hosted by the Deakin Law School (DLS) and Deakin’s Centre for Comparative Corporate Governance (CCCG), international law academic Professor Jörn Axel Kämmerer – who is chair at the prestigious Bucerius Law School in Hamburg – shared his insight into the Brexit fallout by exploring what the future may look like for the UK and EU.
He opened the ‘Brexit and its consequences’ seminar by depicting the UK exit as an ‘unknown and unpredictable journey’ and examined the myriad of legal consequences for trade agreements, intellectual property, status of foreign residents and companies, financial markets, competition, union and tax laws, state aid, security and internal markets.
‘In terms of secondary union law and foreign trade agreements, many agreements cease to apply to the UK (following Brexit) and there is insufficient time for renegotiation,’ he said.
Emphasising the impact to financial market regulation, Prof. Kämmerer elaborated that with Brexit, the most important financial hub will break away from the EU and vice versa.
‘While the general features of the European System of Financial Supervision would remain unscathed – only the EBA [European Banking Authority] would be forced to move away from London – Brexit will likely alter the subjects, standards and quality of financial markets supervision. In all imaginable variants of Brexit, the UK, which so far has inspired innovation and catalysed sounder regulatory standards, will be excluded from active participation in the making of European rules and might even have to resort to their “autonomous implementation”, such as Switzerland),’ he explained. ‘However, we may reasonably speculate about “reverse autonomous implementation”, with the EU deploying models that the British have elaborated for regulation of their own market.’
Prof. Kämmerer also explored the future status and rights for both UK and EU citizens who choose to live on the opposite side of the channel.
‘British EU employees may potentially lose employment or they may apply for Belgian citizenship,’ he said, while also warning there was the potential for the UK to become a ‘tax haven’ due to its departure from customs’ union.
Prof. Kämmerer explained that essentially, there was the choice of a ‘soft’ or ‘hard’ UK exit strategy.
While a ‘soft’ exit would see the UK retain a level of access to the European single market –where there’s free movement of goods, services and people – he explained that a ‘hard’ exit would provide a clean break with the EU and bring changes to trade and immigration agreements, end financial supervision, cease primary, secondary and tertiary union laws, and dispose of the current EU regulations in the UK.
But like all break-ups, it will be complex and the terms of the UK’s exit – and its fight for the best deal possible – will be scrutinised with deep global interest.
‘There’s also the potential for other EU member countries to follow the UK’s path and create a group Brexit pact,’ Prof. Kämmerer cautioned.
Prof. Kämmerer concluded the seminar by citing 16th century English poet John Donne’s celebrated verse: ‘No man is an island, entire of itself, every man is a piece of the continent, a part of the main. If a clod be washed away by the sea, Europe is the less. As well as if a promontory were.’