19 March 2018

Financial Times: UK and EU agree ‘decisive step’ with 21-month Brexit transition

The conditional agreement reached by Michel Barnier, the EU’s chief negotiator, and David Davis, the UK’s Brexit secretary, represents one of the the most valuable economic guarantees secured by the UK since Brexit talks began.

Speaking in Brussels on Monday, Mr Barnier said the deal was a “decisive step”.

“We were able to agree this morning…on a large part of what will make up an international agreement for the ordered withdrawal of the UK…We’ve reached an agreement on the transition period,” said Mr Barnier.

Under the time limited period, the UK will have to abide by all existing EU rules but will lose its say in the decision-making process.

Mr Barnier said he was confident the EU could agree on an “ambitious” framework for future UK-EU foreign and security policy during the transition period.

“The intention is to move as fast as possible as soon as on all aspects of the future relationship”, said Mr Barnier.

On Ireland, the UK has agreed to include a “legal” backstop that would keep Northern Ireland in key parts of the single market and the EU’s customs union.

“The backstop will apply unless, or until, another solution is found,” said Mr Barnier. Talks over the border will continue over the next weeks. Mr Davis said the legal language on the Irish backstop had to be “acceptable to both sides”. He said it was still the aim of the UK to achieve a future trade deal that was so deep and close that it would “not to require specific measures for Northern Ireland”.

The two sides have also reached “complete agreement” on the terms agreed by the two sides on citizens’ rights after Brexit and the UK’s financial settlement, he added.

“Citizens who arrive in the UK during the transition period will have the same rights as those arriving before the Brexit period”, said Mr Barnier.

However, the transition relies on a final agreement on the complete withdrawal agreement later this year. “It’s a good landing spot,” said one EU diplomat briefed on the terms.

Simon Coveney, Ireland’s foreign minister, met Mr Barnier earlier this morning and said negotiations were “moving forward”.

“Progress on Irish issues remains a key priority for both negotiating teams and solidarity with our EU partners remains strong”, Mr Coveney tweeted this morning.

The text agreed by the two sides lays out the precise terms for how Britain would continue apply EU law after Brexit on March 29, 2019, while losing its formal say on the way rules are developed and applied.

In practice it would provide for the free movement of goods, services, capital, and people between the UK and EU until December 31, 2020. The end-date is earlier than the UK requested and the EU has included no explicit clause allowing for a limited extension. However some EU diplomats still expect one to be included in the final withdrawal agreement.

The effective extension of Britain’s participation in the EU single market and customs union provides businesses with at least an extra 21 months to make preparations. It also gives governments longer to plan for Brexit related changes to Britain’s customs, immigration and regulatory systems. [...]

Full article on Financial Times (subscription required)

Draft Agreement on the withdrawal of the UK of Great Britain and Northern Ireland from the EU and the European Atomic Energy Community

Press statement by Michel Barnier following the latest round of Article 50 negotiations

PM Theresa May's letter to European Council President Donald Tusk

David Davis' statement: EU-UK Article 50 negotiations

Reactions:

CBI: Transition delivers victory for common sense

AFME welcomes initial agreement on a transition period

IoD: Political agreement on transition welcome but businesses need more time and clarity to prepare

UK Finance responds to draft transition agreement between EU and UK

© Financial Times