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A Transitional Arrangement must be part of final Brexit deal – Hayes

A Transitional Arrangement must be part of final Brexit deal – Hayes

Brian Hayes MEP today said that following the formal exit of the UK from the EU, there must be some sort of transitional arrangement to allow firms trading into and out of the UK to adapt to new arrangements.

The EU and the Union flags fly outside The European Commission Representation in the United Kingdom in London

“Whenever the UK formally exits the EU, businesses all over Europe are going to have to adapt to a new UK-EU trading regime. This will not be easy and some businesses will have to restructure a large part of their operations. If we have no transitional period, that could mean that trade barriers and tariffs could be imposed overnight between Ireland and Britain.

“While many will treat this as part of the negotiations, it should be a no-brainer that there is a phase-in period to allow all sectors to adapt to a new Europe.

“This will be a hugely important issue for Ireland and the government needs to be prepared to make a strong case for a sufficient transitional period to allow Irish firms to adapt. We don’t know what is going to happen to the €1 billion traded each week between Ireland and the UK following Brexit. A transitional period will be vital to making the whole process smoother. Some 42% of Irish food and drink exports – worth €4.1 billion – went to Britain last year; what will happen to this industry? We do not want tariffs and trade barriers to arise overnight.

“This is not about prejudicing the Brexit negotiations that are likely to start early next year. This is about providing some certainty to everyone in the post-Brexit landscape. It has been remarked that if we go straight into the new post-Brexit trading regime, there will be a cliff effect for many sectors not only in the UK but in a wider European context.

“For financial services, this is especially important. Financial services are traded in and out of the UK at huge levels every day. Firms in the UK have signed up to the EU’s post-crisis financial architecture and it simply cannot happen overnight that these firms can sign up to a new system of financial regulation. Without any transitional period, we don’t know what kind of effect this will have on Europe’s whole financial industry.

“A transitional period would also help regulators in other EU Member States to deal with the large volume of new authorisations of financial services companies establishing themselves outside of the UK. This will be particularly significant for Dublin where many financial services entities have already started preparing to move.”

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