LONDON — Brexit may finally have the “Big Mo.”
After reaching an agreement on the terms of a 21-month transition Monday, British officials now believe they have enough political momentum that the entire withdrawal agreement could be wrapped up by the end of July despite ongoing disagreement over the Irish border.
“Over the last few days we’ve trod an essential part of the road towards an orderly withdrawal,” the EU’s chief Brexit negotiator Michel Barnier told reporters at an upbeat press conference in Brussels.
The newfound optimism, which may yet prove wishful thinking, completes a dramatic turnaround in sentiment in Westminster, which until recently was gripped by a perception of inertia, Cabinet disagreement and indecision over the government’s long-term vision for Brexit.
Just weeks ago, senior U.K. government officials were warning that a transition deal in March was “optimistic” with the two sides remaining far apart on a number of core issues, including citizens’ rights, fishing access and the final cutoff date.
The transition deal has already sparked concerns among Tory Brexiteers though.
A series of rapid concessions by the U.K. on all three following Theresa May’s Mansion House speech earlier this month cleared the way for today’s agreement.
The deal was greeted with a shrug by some in Brussels. “We had no deadline for [a transition deal], it was something that they [the U.K. government] pushed for, it doesn’t change much from our perspective,” said one EU diplomat.
Revised Council guidelines for talks on the U.K.’s future relationship with the bloc, obtained by POLITICO, also added a note of caution — calling on the Commission, its foreign policy chief and member countries to prepare for a no-deal scenario.
But to get this far, the EU has also moved its position (a little), giving some political cover to May’s concessions by allowing consultation with the U.K. over fishing quotas and a clause committing both sides to act in good faith.
“Over the last few days we’ve trod an essential part of the road towards an orderly withdrawal,” Barnier (right) said | Emmanuel Dunand/AFP via Getty Images
The breakthrough comes just three days before the European Council summit in Brussels on Thursday, when EU leaders must formally sign off the transition, while also agreeing a mandate for Barnier to negotiate the outline of a future relationship with Britain, including a trade deal.
For all the signs of progress, however, Ireland remains stubbornly unresolved — with the potential to scupper not only the transition but the entire divorce agreement.
British negotiators remain concerned that last-minute demands by Dublin, Paris or Berlin this week could throw the transition agreement into the air. When asked about the state of play one leading Cabinet minister said: “Fingers crossed for three days now.”
Even if the deal is signed off by EU leaders this week, the U.K. prime minister must still find an alternative “backstop” solution that guarantees an open border between Northern Ireland and the Republic of Ireland. May has dismissed Brussels’ opening proposal to keep Northern Ireland in the customs union and single market as “unacceptable.”
The U.K. insists that the Irish border issue can be solved with a “deep and comprehensive” free-trade deal with customs agreement bolted on, and if that proves impossible, “frictionless” trade can be achieved using technological solutions — something May reiterated in a letter to Council President Donald Tusk Monday.
Despite the fundamental disagreement, one senior U.K. official familiar with the state of negotiations said there was now growing optimism that the momentum gained in the past few weeks can be maintained.
“If we can keep this going, and I think we can, we could have the whole thing wrapped up by end of July,” the U.K. official said. “There is now real momentum. If we can get through this week you could see rapid progress before the summer.”
An early agreement on the withdrawal would free up negotiators on both sides to hammer out the framework of the future relationship between the EU and U.K., including the outline of a free-trade agreement as well as a defense and security partnership that could be introduced during the transition period, according to a second U.K. official. That framework would form the basis of a joint political declaration that together with the legal Withdrawal Agreement would be finalized by October.
“The issue of the Northern Ireland border with the Republic remains unresolved” — David Jones, a former Brexit minister
The transition deal has already sparked concerns among Tory Brexiteers though. They are unhappy with the retreat over the U.K.’s new immigration system not applying to EU citizens arriving during the transition and on the U.K.’s agreement to allow the EU to continue to set fishing quotas — albeit with British consultation.
On Ireland, they fear the EU will show little willingness to engage with alternative U.K. proposals to resolve the Irish border issue if the EU’s backstop option remains in the withdrawal text, and are seeking agreement on an alternative “form of words” to guarantee their support.
“The issue of the Northern Ireland border with the Republic remains unresolved,” said David Jones, a former Brexit minister and leading figure among pro-Brexit Conservative backbenchers. “We would wish to see a form of words that would be acceptable to a U.K. prime minister being agreed as soon as possible. The prime minister has already ruled out the form of words being used by the European Union.”
A spokesperson for the Democratic Unionist Party also reiterated that Brussels’ backstop text was “totally unacceptable.”
Britain’s Prime Minister Theresa May delivers her Mansion House speech | Jonathan Brady/WPA Pool via Getty Images
However, on other aspects of the transition agreement, May won vital political cover from the figurehead of the backbench Brexiteer caucus, Jacob Rees-Mogg. While criticizing the government for having “given in on fishing rights, free movement and the issue of sincere cooperation,” he said the transition agreement was “nonetheless tolerable if the end state is a clean Brexit.”
“As so often the words of Sir Francis Drake apply: ‘It is not the beginning, but the continuing of the same unto the end, until it be thoroughly finished, which yieldeth the true glory,’” he said.
Pro-EU Conservatives welcomed the transition deal. Nicky Morgan, chair of the House of Commons’ treasury committee, said it would “hopefully give businesses … more time to adjust to life after Brexit and slow down any plans they had felt forced to make for a no-deal Brexit.”
“But there are clearly some very tricky issues, particularly on the Irish border, to be worked through,” Morgan added.
In truth, the U.K. was left with little choice but to accept the EU’s backstop for now. As David Davis said, to do otherwise would be to backtrack on December’s crucial Joint Report agreement — something that would very likely have killed prospects for a transition deal.
“It shows what can be achieved when people and prosperity are placed above politics and ideology” — Carolyn Fairbairn
“Both the United Kingdom and the European Union are committed to the Joint Report in its entirety,” Davis said. “And in keeping with that commitment, we agree on the need to include legal text detailing the ‘backstop’ solution for the border between Northern Ireland and Ireland in the Withdrawal Agreement.”
As for the businesses in whose interests the U.K. government was, first and foremost, acting in pursuit of a transition arrangement, there was delight and back-slapping for a lobbying job well done.
“This is what businesses have been calling for since last summer,” said Carolyn Fairbairn, director general of Confederation of British Industry. “It brings a welcome gift of time for firms on both sides.”
But she added pointedly: “It shows what can be achieved when people and prosperity are placed above politics and ideology.”
David Herszenhorn contributed reporting.