Impact of Brexit on the European Construction Industry

15 January 2021

The European Union (EU) and the United Kingdom (UK) have agreed on 24 December 2020 on a preliminary text for a comprehensive Trade and Cooperation Agreement. The UK Government has also published on 25 December 2020 a respective ‘Summary Explainer’. Whereas the Draft Agreement comprises a Free Trade Agreement, which provides for zero tariffs and zero quotas on all goods that comply with the appropriate rules of origin and also covers trade in goods and services as well as a broad range of other areas, such as investment, competition, State aid, tax transparency, air and road transport, energy and sustainability, fisheries, data protection, and social security coordination, the fact of the matter is that, as of 01st January 2021, the UK has left the EU Single Market and Customs Union and the free movement of persons, goods, services and capital between the UK and the EU has ended.

To help EU and UK businesses deal with the changes resulting from the fact that the EU and the UK are two separate markets with distinct regulatory and legal spaces, the UK Government and the EU Commission have issued extensive legal guidance on the Internet. The UK Government published already at the beginning of November 2020 information for the construction sector on preparing for the end of the transition period. The European Commission adopted in July 2020 a “Readiness Communication”, accompanied by some 90 sectorial notices, and has published recently information on the terms of the future cooperation between the EU and the UK.

The starting-point for the future trade relationship in the construction sector is that construction companies on both sides of the Channel will no longer benefit from the free movement of services and persons as defined by the EU ‘acquis communautaire’ but will have to comply with the – varying – rules of the UK or each EU Member State, or relocate to the UK or conversely the EU, if they want to continue operating as they do today. In addition, there will be no more mutual recognition of professional qualifications. However, the draft agreement comprises provisions on cross-border trade in services and investment, business mobility, contractual service suppliers and independent professionals, as well as on Govern Procurement and Social Security Coordination.

Further information can be gathered from the sources below:

What does the Brexit Deal mean for the Construction Industry? Still some serious snagging issues, 12 January 2021

The Impact of Brexit on the Construction Industry – an overview, 14 January

Brexit: The key implications for Employers and HR Professionals, 13 January