Creative Sector’s Future Uncertain Amidst Brexit Trigger and Pre-Negotiations

Much has happened since March 29 when Prime Minister Theresa May triggered Brexit / Article 50 with a letter to European Council President Donald Tusk formally notifying EU leaders that the U.K. is leaving the European Union.  The clock is now running on Britain’s window to exit and according to the Treaty that can be no later than April 2019.  In response, on March 31, Tusk presented stringent draft guidelines to the European Council, consisting of the 27 remaining member states, explaining how the EU intends to negotiate the U.K.'s departure. The negotiation guidelines are expected to be approved during a summit of the European Council with only minimal changes on April 29.

So how will this all play out? According to EU treaties, the European Council, Council of the EU and the European Commission will all have a role in informing and agreeing the EU’s negotiating position. The European Council will agree the high-level guidelines for the negotiations; the Council of the EU will approve a more detailed, technical mandate; and the Commission will carry out the bulk of the negotiations.

These draft guidelines act as a navigation vehicle for the European Commission, which will draft a more detailed mandate. It is likely that the European Council will then hand over to the European Commission and the Council of the EU to run the detailed negotiations.

The Commission, Council and Parliament have all appointed lead Brexit negotiators, who will play a key role in preparing for and conducting the negotiations.  While the European Parliament’s role in the negotiations process is fairly limited, they will be ‘immediately and fully informed at all stages of the [negotiations] procedure’.  Once negotiations have concluded, both the Council of the EU and the European Parliament are entitled to vote on the final deal.

On April 5, however, the European Union’s Parliament toughened its stance on upcoming talks in an important vote on Brexit and the U.K.’s divorce.  With support from 516 out of 699 members, the European Parliament enunciated additional demands to the main principles laid out by the European Commission’s chief negotiator, Michel Barnier, who is likely to take them into account during the talks.  Parliament also warned the U.K. not to pursue any bilateral deals with EU countries or nations outside the bloc for as long as Britain remained a member or risk being kicked out of the negotiations.

Now starts the two years of negotiations expected to commence at a meeting in June between the EU and UK, which will cover everything from citizen’s rights and immigration to trade agreements.  But the longer the exit talks are delayed, the later the substantive dialogue on a post-exit trade deal will effectively start.  For the entertainment industry, we are left with uncertainty as to whether British producers and companies will still have access to EU subsidies, whether the co-production treaties between Britain and the EU will still operate, and whether talent will still easily be able to move across borders. For producers outside of Britain, there is the potential disruption to their businesses since many have long incorporated Britain into their project planning and finance. With these far reaching consequences, international business leaders of course are hoping that deal terms and exit will be implemented in such a way as to not disrupt the worldwide economy.

IFTA is following these developments closely and actively participating on the British Film Institute’s task force to examine and educate the UK Government on the potential impact on the audio-visual industry.  For additional information contact Susan Cleary at SCleary@ifta-online.org or Eric Cady at ECady@ifta-online.org.