After nearly four years, three prime ministers, and numerous national referendums, the United Kingdom (UK) eventually exited the European Union (EU) on January 31, 2020. In practice, what does this mean? Very little, one could say. Because the UK will be in a "transition phase" until the end of 2020, most things will remain as they are. Despite the fact that the UK will no longer be a member of the EU, it will continue to function under EU laws and regulations. Here's a rundown of what will remain constant and what will change during the 2020 transition period:
The UK now has only 11 months to reach a trade agreement with the EU or face the prospect of further postponing Brexit. If UK Prime Minister Boris Johnson fails to reach a trade agreement, the transition time will be extended. Although putting pen to paper is not enough, Johnson may still be compelled to postpone Brexit if the required infrastructure to implement the new deal is not in place. Meanwhile, at a cabinet meeting in Sunderland, Johnson told his ministers that the British government's goal is to establish free-trade agreements covering 80 percent of the UK's trade with foreign countries within three years. As I've indicated in prior Brexit remarks, only time will tell if everything works as planned. As always, the TC Capital Partners Investment Strategy and Research team is keeping a careful eye on the situation and its potential impact.