Brexit Jargon Buster

Glossary of terms used in relation to Brexit

Last updated: 14 January 2021

 

Terms

Explanation

 

31 January 2020

The UK's withdrawal from the EU took effect on 11 p.m. GMT on 31 January 2020, and at that moment the Withdrawal Agreement entered into force. From this date the Transition Period came into effect.

 

Article 50

Article 50 of the Treaty on European Union was added by the Lisbon Treaty and for the first time set out an express right and process for a Member State to withdraw from the EU by serving two years' notice.

 

Council of Ministers

The main decision-making body of the EU, together with the European Parliament, comprising ministerial representatives of all of the EU Member States.

 

Court of Justice of the European Communities

The Court established under the EU Treaties to resolve disputes on EU law between Member States and the EU institutions and between individuals/undertakings and the EU institutions, by means of i) actions or appeals against acts of the EU institutions and ii) referrals from the courts of Member States for an interpretative ruling on points of EU law. The Court comprises the full Court and also the General Court, which is a court of first instance for actions or appeals against EU institutions (but which does not deal with referrals from national courts).

 

Customs Union

A type of preferential trade agreement between countries; the EU's Customs Union is an area comprising the EU Member States (and also Guernsey, Jersey, the Isle of Man and Monaco) in which no tariffs are imposed internally on imports or exports and all member countries apply a common external tariff on goods imported from outside the Customs Union. Turkey, Andorra and San Marino have bilateral customs unions with the EU (in the case of Turkey and Andorra this excludes agricultural products).

 

EEA

The European Economic Area, set up in 1994, to extend the EU’s internal market to countries in the EFTA; EU legislation relating to the single market becomes part of the legislation of the EEA countries once they have agreed (through the EFTA Secretariat) to incorporate it. The EEA comprises the 27 EU Member States and also three EFTA States, Iceland, Liechtenstein and Norway, in an internal market governed by the EU single market rules. The EEA Agreement allows these three EFTA countries to participate in the EU’s single market.

 

EFTA

The European Free Trade Association, an intergovernmental organisation working to promote free trade and economic integration for its member states. It was founded in 1960 by Austria, Denmark, Norway, Portugal, Sweden, Switzerland and the United Kingdom, and later joined by Finland, Iceland and Liechtenstein. However, currently there are only four EFTA countries, Iceland, Liechtenstein, Norway and Switzerland, as the other members left at different times in order to join the EU.

 

EU

The European Union, an economic and political union of 27 countries. It operates an internal (or single) market which allows free movement of goods, capital, services and people between member states. Following the UK’s withdraw, the EU member states are: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, and Sweden.
  EU–UK Trade and Cooperation Agreement An agreement agreed on 24 December 2020 governing the future relationship between the EU and the UK from 1 January 2021 onwards. The European Commission describe the agreement as consisting of:
a Free Trade Agreement outlining cooperation on economic, social, environmental and fisheries issues;
a close partnership on citizens’ security; and
an overarching governance framework.

 

EU Withdrawal Act or (in full) the European Union (Withdrawal) Act 2018

The legislation which repeals the European Communities Act 1972 with effect from the end of the Transitional Period; this legislation will also retain in UK domestic law the existing corpus of EU legislation which has not already been incorporated into domestic UK law, including in particular EU Regulations (which would otherwise no longer be effective when the UK ceases to be an EU member state and EU law no longer applies in the UK) and also statutory instruments adopted under the 1972 Act implementing EU directives (said statutory instruments would otherwise lapse on repeal of the 1972 Act) in order to ensure a functioning statute book following the UK's exit from the EU.

 

European Communities Act 1972

The primary UK legislation which gave legal effect in the UK to the EU Treaties and EU law and which ensured the supremacy of EU law in relation to domestic law in the UK during the UK’s membership of the EU.

 

Eurozone

The Euro area comprising the EU Member States (i.e. 19 of the 27 EU Member States) which have adopted the Euro as their common currency and sole legal tender.

 

Fisheries

An area of major contention during the Brexit negotiations, during which the UK sought to regain control of its waters as it is felt historically the UK had not received a fair share of fishing quotas under the EU Common Fisheries Policy, while the EU sought to maintain EU fishermen access to traditionally UK waters to avoid economic disruption.

 

Four Freedoms

In the context of the EU, the freedoms of movement of goods, services, workers and capital between EU member states, without internal barriers (subject to limited exceptions). The Four Freedoms lie at the heart of the EU Single Market. These arrangements have been extended under the EEA Agreement to also cover Iceland, Liechtenstein and Norway.

 

Free Trade Agreement (FTA)

An international treaty or agreement (based on international law) to form a free-trade area between the cooperating states. FTAs, a form of trade pact, typically liberalise the tariffs and duties that the participating countries impose on imports and exports between them and make reciprocal provisions on related matters such as rules of origin of goods, with the goal of reducing or eliminating trade barriers.

 

GATT

The General Agreement on Tariffs and Trade is the main WTO agreement on goods.

 

Hard Brexit

A UK withdrawal from the EU without a transitional period of participation in the Single Market or Customs Union, and/or without any future trading or relationship agreement with the EU.

 

Level Playing Field

A set of common rules – for example, on competition, state aid, taxation, labour and environmental standards, climate change – which are designed to ensure that one country does not have an unfair advantage over another. The Level Playing Field has been one of the main areas of contention in the negotiations on the EU-UK future relationship.

 

Lisbon Treaty

The Treaty of Lisbon between the EU Member States which amended the Treaty on European Union, including the insertion of Article 50 concerning a Member State's ability to withdraw from the EU.

 

No-deal Brexit

A scenario where the UK left the EU without a Withdrawal Agreement and/or Future Relationship Agreement.

 

Northern Ireland Protocol

An annex to the Withdrawal Agreement which recognises the unique situation arising from the land border between Northern Ireland and Ireland (the only part of the UK which physically borders with the EU) and which seeks to avoid the reintroduction of a hard border in Northern Ireland. The Protocol outlines a solution that came into force on 1 January 2021 allowing Northern Ireland to be part of the UK customs territory (meaning Northern Ireland will follow UK trading policy, including any future trade agreements), while also being required to apply EU customs law in full. Under the Protocol, Northern Ireland will also remain aligned with the rules of the EU Single Market for goods.

The Protocol gives the Northern Ireland Assembly a decisive voice every four years on whether to continue with these arrangements.

 

Passporting

The exercise of the right of a trader in the EU or EEA to conduct its business in another EU or EEA State based on its home-state authorisation, without requiring further authorisation in the host-state, based on the EU and EEA free movement rules.

 

Qualified Majority

The weighted voting system used for all but the most sensitive issues by the EU Council of Ministers, involving a 55% majority or (in some cases) 72% majority of Member States representing 65% of the EU population.

 

Single Market

The geographical market area established pursuant to the Single European Act, comprising all of the EU Member States and three additional member countries of the EEA, in which goods, services, workers and capital may circulate freely without internal barriers (subject to limited exceptions to cover certain essential requirements) and in accordance with the EU principle of home-state authorisation. Note that under the terms of the Northern Ireland Protocol, Northern Ireland will continue to remain aligned with the rules of the EU Single Market for goods at the end of the Transition Period.

 

Soft Brexit

A UK withdrawal from the EU whereby the UK benefits from a transitional period of participation in the Single Market or the Customs Union, and/or agrees a future trading or relationship agreement with the EU.

 

‘Third Country’ Status

Generally understood as a country not in the EU, which does not adhere to the Four Freedoms (with the exception of countries that sign up to an FTA guaranteeing these rights, for example Norway).

 

Transition Period

The 11-month period from 31 January 2020 to 31 December 2020 where the UK was no longer a member of the EU but remained a member of the Single Market and the Customs Union, and remained subject to EU rules. The Transition Period allowed time for the UK and EU to reach a deal on their future relationship.

 

UK Internal Market Act

An Act governing trading arrangements after the Transition Period across the four countries of the UK and restricting certain powers of the devolved administrations. The Act is aimed at preventing harmful new barriers to trade between different parts of the UK.

 

Withdrawal Agreement

A treaty between the EU and the UK setting out the terms of the UK’s withdrawal from the EU. Signed on 24 January 2020, the agreement consists of two main documents:

• The Withdrawal Agreement itself, including the Northern Ireland Protocol; and
• A Political Declaration setting out the framework for the future relationship between the United Kingdom and the European Union.

The agreement covers, among other things, citizen’s rights, the Transition Period, financial matters and the Northern Ireland Protocol. 

  World Trade Organisation (WTO) The WTO, a global, multilateral, inter-governmental agreement on trade in goods and certain services, and based mainly on the principles of national treatment and Most Favoured Nation treatment. Where no trade agreement exists between the UK and another country, trade with that country will take place under WTO Rules. 
  WTO Rules and Most Favoured Nation (MFN)
WTO Rules state that the same trading terms must be applied to all WTO members, unless there is a trade agreement between two or more countries. This is known as Most Favoured Nation (MFN) treatment. Most Favoured Nation (MFN) means that the UK cannot offer better trading terms to one country and not another, unless through a trade agreement. The UK currently trades with many countries on WTO terms, for example China, India, Brazil and Saudi Arabia.