Glossary of terms

This glossary contains a list of commonly-used terms and acronyms around Brexit. You can also link through each term to our blog for further clarification and associated stories or commentary on them.

Article 50 TEU – Article 50 of the Treaty on European Union was inserted into the European Union (EU) Treaty by the Lisbon Treaty in 2009. It allows a Member State to leave the EU and sets out a procedure for doing so.

Free Trade Agreement (FTA) or Bilateral FTA – Bilateral FTAs facilitate trade and investment by reducing or eliminating tariffs, import quotas, export restraints and other trade barriers.

Common commercial policy – This complements the Customs Union and means that the EU negotiates on behalf of its member states regarding common arrangements for imports from other countries. 1997’s Amsterdam Treaty extended the scope of responsibility to include to services and intellectual property rights.

Common Travel Area – The CTA is an open borders area comprising the UK (including the Channel Islands and the Isle of Man) and the Republic of Ireland. Based on legally non-binding arrangements, the internal borders of the CTA have been in operation since the 1920s and are subject to minimal border controls. UK and Irish citizens can normally cross internal borders with minimal identity documents.

Council of Europe – An international organisation designed to promote and protect human rights. Composed of 47 member states – the 28 member states of the European Union plus 19 other nations – who are all signatories to the ECHR. The Council of Europe is not an EU body and the UK will remain a member post-Brexit unless it also decides to withdraw from the ECHR.

Council of the European Union (or “Council of Ministers”) – In the Council, government ministers from each EU country meet to discuss, amend and adopt laws, and coordinate policies. The ministers have the authority to commit their governments to the actions agreed on in the meetings.Together with the European Parliament, the Council is the main decision-making body of the EU. This should not be confused with the European Council or the Council of Europe.

Court of Justice of the EU – The Court of Justice of the European Union interprets EU law to make sure it is applied in the same way in all EU countries, and settles legal disputes between national governments and EU institutions. It was established in 1952 and is based in Luxembourg.

Customs union – A customs union is a form of trade agreement between two or more countries. It means they decide not to impose tariffs (taxes on imports) on each other’s goods and agree to impose common external tariffs on goods from countries outside their customs union. Goods can travel freely within the EU’s customs union without border checks. The EU’s Common Commercial Policy (CCP) means that the EU negotiates trade deals on behalf of all its members, and members cannot reach their own bilateral trade agreements”

Department for Exiting the European Union (DExEU) – The Government department responsible for overseeing negotiations to leave the EU and establishing the future relationship between the UK and EU. Was established on 14 July 2016 when Theresa May appointed David Davis as Secretary of State for Exiting the European Union.

Department for International Trade (DIT) – The Government department responsible for promoting British trade across the world and ensuring the UK takes advantage of opportunities open to it. Responsible for developing, coordinating and delivering a new trade and investment policy to promote UK business across the globe; developing and negotiating free trade agreements and market access deals with non-EU countries; negotiating plurilateral trade deals and providing operational support for exports and facilitating inward and outward investment. Was established on 14 July 2016 when Theresa May appointed Liam Fox as Secretary of State for International Trade.

Direct effect – The principle of direct effect enables individuals to immediately invoke a European provision before a national or European court. This principle only relates to certain European acts. Furthermore, it is subject to several conditions. The direct effect of European law is, along with the principle of precedence, a fundamental principle of European law. It was enshrined by the Court of Justice of the European Union (CJEU). It enables individuals to immediately invoke European law before courts, independent of whether national law test exist.

Equivalence regime – Financial services in the EU are regulated activities. This means that firms have to be authorised and approved by a regulator before they can operate in a market. In the EU, authorisation in one EU Member State can mean that the firm can operate and sell in all EU countries if it has a passport for that activity. This is called passporting. With respect to the relation between the EU and countries outside, there is an alternative system of recognition called EU Equivalence.

EU Budget Contributions – The UK will remain a member of the EU until its departure has been negotiated and will continue to contribute to the EU budget until it formally departs the EU. The UK makes its contributions to the EU budget in the same way as all Member States. However, the UK receives a rebate on its net contribution. The rebate was introduced in the mid-1980s to address the issue of the UK making relatively large net contributions to the EU budget. In 2015 the UK government paid £13 billion to the EU budget, and EU spending on the UK was £4.5 billion. The UK’s net contribution was estimated at about £8.5 billion.

EU-Canada Comprehensive Economic and Trade Agreement (CETA) –  This is a new trade deal between the EU and Canada that will cut 98% of tariffs between them and boost trade and investment. It means that European firms can bid for Canadian public contracts, European firms can sell services in Canada and opens the door to recognising European qualifications in Canada.

European Commission – The European Commission (EC) is an institution of the European Union, responsible for proposing legislation, implementing decisions, upholding the EU treaties and managing the day-to-day business of the EU.

European Communities Act 1972 – The 1972 European Communities Act was the piece of legislation that brought the UK into the Europe Union: it gives EU law supremacy over UK national law. A large amount of EU law effective in the UK currently relies on the 1972 Act. The Act started life as the European Communities Bill, which was introduced into the House of Commons in 1972.

European Convention on Human Rights – The European Convention on Human Rights protects the human rights of people in countries that belong to the Council of Europe. All 47 Member States of the Council, including the UK, have signed the Convention. Its full title is the ‘Convention for the Protection of Human Rights and Fundamental Freedoms’. The Convention consists of numbered ‘articles’ protecting basic human rights. The UK made these rights part of its domestic law through the Human Rights Act 1998. All 28 EU member states plus 19 other countries are signatories to the Convention, including Russia. Although Theresa May has previously called for the UK’s withdrawal from the ECHR, it is not current Government policy. The ECHR established the European Court of Human Rights (ECtHR).

European Council – The European Council defines the EU’s overall political direction and priorities. It is not one of the EU’s legislating institutions, so does not negotiate or adopt EU laws. Instead it sets the EU’s policy agenda, traditionally by adopting ‘conclusions’ during European Council meetings which identify issues of concern and actions to take.

The European Court of Human Rights (ECtHR) – The ECtHR, based in Strasbourg, is the international court established by the ECHR. It is not a European Union body and is distinct from the European Court of Justice (ECJ) in Luxembourg. The UK will remain under the jurisdiction of the ECtHR post-Brexit unless the UK also withdraws from the ECHR. Sometimes referred to as “the Strasbourg Court”.

European Court of Justice (ECJ) – The highest chamber of the Court of Justice of the EU. Sometimes referred to as “the Luxembourg court”.

European Economic Area (EEA) – The EEA is the area in which the EU’s single market operates – the free movement of goods, persons, services and capital. It comprises 30 signatories to the EEA Agreement, including 27 member states of the EU (Croatia is a provisional member) as well as 3 out of 4 members of EFTA. Switzerland is a member of EFTA but not the EEA. Instead it is linked to the EU through a series of bilateral agreements.

European Free Trade Association (EFTA) – The European Free Trade Association (EFTA) is an intergovernmental organisation set up for the promotion of free trade and economic integration to the benefit of its four Member States: Iceland, Liechtenstein, Norway, Switzerland. EFTA was  founded in 1960 as an alternative trade bloc for European countries who did not join the EU. The UK was a member of  EFTA until it joined the EU in 1973. All EFTA members bar Switzerland are part of the European Economic Area (EEA), giving them membership of the EU’s single market.

European Parliament – The European Parliament is the EU’s law-making body. It is directly elected by EU voters every 5 years. The last elections were in May 2014. It has three main roles which are legislative, supervisory and budgetary.

Exiting the European Union Committee – The Exiting the European Union Committee is appointed by the House of Commons to examine the expenditure, administration and policy of the Department for Exiting the European Union and matters falling within the responsibilities of associated public bodies. The Committee is chaired by Labour MP Hilary Benn.

Free trade agreements (FTAs) – FTAs are agreements between separate nations or trade blocs to reduce trade barriers and increase trade. The area covered by a free trade agreement is known as a “free trade area”. A free trade area is a group of countries that have few or no price controls in the form of tariffs or quotas between each other. Free trade areas allow the agreeing nations to focus on their comparative advantages and to produce the goods they are comparatively more efficient at making, thus increasing the efficiency and profitability of each country. One of the most well-known and largest free trade areas was created by the signing of the North American Free Trade Agreement (NAFTA) on January 1, 1994. This agreement between Canada, the United States and Mexico encourages trade between these North American countries.

Freedom of movement – Freedom of movement allows citizens of the European Union (EU) to move to, live in, and in certain circumstances access the welfare system of the EU country to which they have moved. Freedom of movement is one of the founding principles of the EU.

Great Repeal Bill – The Government has announced that the Great Repeal Bill will repeal the European Communities Act 1972 and incorporate European Union law into domestic law, “wherever practical”. The Government has indicated that these legal changes within the Bill would take effect on “Brexit Day”: the day the UK officially leaves the European Union. The Government has also stated that the Great Repeal Bill will contain delegated powers to enable the Government to adapt any laws on the statute book that originate from the EU so as to fit the UK’s new relationship with the EU. This may require major swathes of the statute book to be assessed to determine which laws will be able to function the day the UK officially leaves the EU.

Mixed agreements – An agreement between the EU and external countries concerning issues of Community and member state competence – for example the Cotonou Agreement. Such agreements must be signed by both the EU and its member states. The Lisbon Treaty has established the Union as a legal personality. It opened for mixed agreements on foreign policy and community topics. Hence, in areas where the Union legislates, the EU can sign various kinds of agreements on behalf of the member states, who are consequently not allowed to negotiate international agreements on their own in these areas. The so-called ‘competence of external negotiation’, has become a sole competence of the EU – member states are no longer allowed to negotiate within this area on their own.

Passporting – Passporting is the exercise of the right for a firm registered in the European Economic Area (EEA) to do business in any other EEA state without needing further authorization in each country. Often companies based outside of the EEA will get authorized in one EEA state and use its passporting rights to either open an establishment elsewhere in the EEA or providing cross-border services. This is valuable to multi-national companies because it eliminates a lot of red tape associated with gaining authorization from each individual country, a process that can be lengthy and costly for a business.

Ratification – The action of signing or giving formal consent to a treaty, contract, or agreement, making it officially valid.

Right to Remain – Indefinite leave to remain (ILR) or permanent residency (PR) is an immigration status granted to a person who does not hold the right of abode in the United Kingdom (UK), but who has been admitted to the UK without any time limit on his or her stay and who is free to take up employment or study, without restriction.

Single Market – A single market is a trade bloc without any internal borders or other regulatory obstacles to the free movement of goods and services. A functioning Single Market stimulates competition and trade, improves efficiency, raises quality, and helps cut prices. The European Single Market seeks to guarantee the free movement of goods, capital, services, and people. It comprises all members of the EEA, plus Switzerland through a series of bilateral agreements.

Single Market Access – This refers to the terms on which countries outside the single market can  trade with it. Some countries, like Singapore or Canada once CETA takes effect, have favourable access to the European single market through a free trade agreement (FTA). Theresa May has stated that she is seeking access to the single market via an FTA once the UK has left th EU.

Single Market Membership – This means being part of EU’s single market with free movement of goods, finance, and people around the EU, without any tariffs. Full ‘membership’ of the EU Single Market substantially reduces the costs of trade within the EU. Whilst some costs such as transport costs and cultural barriers such as language remain, the Single Market eliminates tariffs (border taxes) and customs checks and, importantly, reduces non-tariff barriers, which are particularly important for services trade. Whilst any country has ‘access’ to the EU as an export destination, membership of the Single Market reduces ‘non-tariff’ barriers in a way that no existing trade deal, customs union or free trade area does. Current membership of the single market comprises all members of the EEA, as well as Switzerland through a series of bilateral agreements.

Super Qualified Majority – The Lisbon treaty provides for that a super qualified majority is composed of 72% of the member states also comprising 65% of the EU-population. The super qualified majority is used when the Council or the European Council is taking a decision not proposed by the Commission or the Foreign Minister, the “High Representative”.

Tariff – A tax or duty to be paid on a particular class of imports or exports.

Trans-Atlantic Trade and Investment Partnership (TTIP) – TTIP is a free trade agreement currently being negotiated between the EU and US. It aims to help business by opening up the US to EU firms, helping cut red tape that firms face when exporting and setting new rules to make it easier and fairer to export, import and invest overseas. It has been suggested that TTIP will help generate jobs and growth across the EU and help the EU influence world trade rules.

UK Representation in Brussels (UKRep) – The United Kingdom Permanent Representation to the European Union (UKRep) represents the UK in negotiations that take place in the EU. UKRep is one of the UK’s busiest posts, with a team sourced from over 20 UK government departments working to ensure that UK policies are explained to other EU member states, the European Commission and members of the European Parliament. UKRep is led by the UK’s Permanent Representative (or Ambassador) to the EU, formerly Sir Ivan Rogers and now Sir Tim Barrow.

Unilateral Tariff Agreement – A unilateral trade agreement is a treaty that’s imposed on one nation by another. It benefits one nation only. The World Trade Organization defines a unilateral trade preference, or a preferential trade agreement,  as any trade agreement granted by one nation that isn’t reciprocated in return. Unilateral trade policies occur whenever one country imposes a trade restriction, such as a tariff, on all imports.

Vienna Convention – Adopted in 1969, this is a treaty concerning the international law on treaties between states. The Convention defines a treaty as “an international agreement concluded between states in written form and governed by international law,” as well as affirming that “every state possesses the capacity to conclude treaties.”

World Trade Organization (WTO) – The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations. At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations and ratified in their parliaments. The goal is to help producers of goods and services, exporters, and importers conduct their business. The WTO is run by its member governments. All major decisions are made by the membership as a whole, either by ministers (who usually meet at least once every two years) or by their ambassadors or delegates (who meet regularly in Geneva).

WTO Rules – If no new trading relationship is agreed by the end of the 2-year Article 50 process for the UK leaving the EU, and no extension is granted, the UK would drop automatically out of the EU. The UK’s trade with both the EU and most of the rest of the world would revert to World Trade Organisation (WTO) rules. Under WTO rules, each member must grant the same “most favoured nation” (MFN) market access, including charging the same tariffs, to all other WTO members. This would significantly increase the costs of UK-EU trade.

Theresa May has said that if the EU offers the UK a “bad deal”, the UK would reject it. The Prime Minister and Chancellor have both said that in this scenario they would change the UK’s “economic model” through sweeping cuts in tax and regulation. This has been likened to turning the UK into “the Singapore of Europe.”


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