When May first acknowledged the need for a transition period in her Florence speech last September,<\/a> she said it should last \u201cabout two years.\u201d Her Brexit secretary last week told MPs it could last between 21 and 27 months.<\/p>\n The EU27 directives will call for ending the transition on December 31, 2020, meaning a transition period of 21 months. From a technical standpoint, using that date as an end point makes sense, as it coincides with the conclusion of the EU\u2019s current long-term budget plan, which the U.K. has agreed to continue paying into up to the end. If a transition lasts beyond that, the U.K. would have to keep paying, but under the new budget period. How much would likely become a matter of serious contention.<\/p>\n Nonetheless, it appears that 21 months may not be enough time and some EU countries proposed adding flexibility on the date<\/a>. Top officials in Brussels and London, however, seem inclined to sidestep the issue<\/a> at the moment, knowing that they could always extend the transition at a later date once the need becomes impossible to ignore. That said, the U.K. could insist on language (not currently in the draft directives) that specifically allows an extension if necessary. In return, the EU27 could demand to set a price in advance. The British side, if it wants to be creative, could also propose a provision that would allow London to end the transition early in the unlikely event that the U.K. is ready to leave sooner than expected.<\/p>\n Bust-up potential: The EU directives would require the U.K. to continue fulfilling all obligations of treaties, free-trade agreements and other accords between the bloc and so-called third countries. These include not only the mega trade deals between the EU and countries like Canada, Japan and South Korea, but a long laundry list of other agreements covering a vast array of policy areas including aviation, energy, agriculture and more.<\/p>\n Adjustments in draft language of the directives had suggested the EU is prepared to allow Britain to continue benefiting from these agreements throughout the transition, but ultimately that seems to be a matter for the upcoming negotiations. What the EU seems to be insisting on is that the U.K. cannot violate the terms of any of those agreements, nor adopt and implement any replacement deals until the transition is over.<\/p>\n London\u2019s position is similar but not identical. In a speech on Friday<\/a>, David Davis said: \u201cParticipating in a customs union should not and will not preclude us from formally negotiating \u2014 and indeed signing \u2014 independent trade agreements.\u201d He conceded that those deals wouldn\u2019t come into effect until the end of a transition.<\/p>\n The extent to which Britain can continue benefiting may also depend on the third countries. If those countries object, diplomats say, it will be up to London to convince them otherwise. Brussels is not going to exert much energy on Britain\u2019s behalf. On that point, Davis stated confidently in his speech that maintaining the status quo was \u201calso in the interests of those countries.\u201d That remains to be seen.<\/p>\n Bust-up potential: The Phase 1 agreement gives EU citizens living in the U.K. and British citizens living in the EU27 special protections until the official withdrawal date of March 29, 2019. In a move that effectively reopens the \u201cJoint Agreement\u201d that was signed with great fanfare before Christmas<\/a>, the EU is now pushing to extend those protections<\/a> until the end of the transition period. That\u2019s unlikely to go down well with the U.K.<\/p>\n Theoretically, it would be possible to maintain the freedom of movement required for participation in the single market until the end of transition, while still ending the special guarantees of citizens\u2019 rights on the Brexit date. Citizens arriving to live or work in the U.K. after the withdrawal date would have to comply with any new immigration regime adopted by the U.K.<\/p>\n Britain also wants to register citizens from the EU27 arriving during a transition period \u2014 something that has raised objections among MEPs.<\/p>\n Bust-up potential: After Brexit, the U.K. will no longer have any voting rights or decision-making power in the EU, but will be required to comply with all EU laws and regulations, including any changes made without London\u2019s approval or participation. In some cases, however, the EU27 have said it will be useful, or even necessary, to consult the U.K., and the draft directives make clear that it will be necessary to negotiate how those consultations will take place.<\/p>\n \u201cDuring the transition period, as a general rule, the U.K. will not attend meetings of committees \u2026 or Commission expert groups and other similar entities or of the agencies, offices or bodies where member states are represented.\u201d But it also notes, \u201cexceptionally on a case-by-case basis, the United Kingdom could be invited to attend without voting rights such meetings.\u201d<\/p>\n The draft also notes the need for \u201cspecific consultations \u2026 with regard to the fixing of fishing opportunities.\u201d The EU position so far is that the U.K. should be permitted as an observer when it is \u201cin the interest of the Union.\u201d<\/p>\n This is unlikely to be enough for the U.K. In his Friday speech on the British position on transition, Davis said: \u201cWe will have to agree a way of resolving concerns if laws are deemed to run contrary to our interests and we have not had our say and we will agree an appropriate process for this temporary period \u2026 It\u2019s very, very important. If there are new laws that affect us, we have the means to resolve any issues during that period.\u201d<\/p>\n Davis may be playing up for a domestic audience to prove that the U.K. will not be a \u201cvassal state\u201d during a transition but whether saber-rattling or not, expect tense negotiations on this point.<\/p>\n Bust-up potential: It\u2019s important to remember that the terms of the transition period will be written into the overall withdrawal treaty between the EU and the U.K., meaning that if the two sides fail to reach an agreement on an overall divorce deal, there will be no transition period. Put another way, the transition is not a safety net that can buy more time for negotiators if they fail to get a withdrawal treaty signed and ratified.<\/p>\n Officials have said they expect the transition terms to be agreed in eight weeks or less. If they succeed in that timeframe, it will leave just about six months to finish the overall withdrawal treaty<\/a>, which negotiators have said must be completed by October 2018 to have any hope of ratification before March 29, 2019.<\/p>\n Both sides adhere to the \u201cnothing is agreed until everything is agreed\u201d mantra, so this isn\u2019t a point of contention \u2014 but it will be very much in the minds of both negotiating teams.<\/p>\n Bust-up potential: Original Article<\/a><\/p>\n [contf] [contfnew] Agreeing on terms for a Brexit transition is meant to be the easy bit \u2014 but it may not be so simple…<\/p>\n","protected":false},"author":1,"featured_media":61129,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[202],"tags":[],"class_list":["post-61128","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance"],"yoast_head":"\n![\"?\"\/](\"https:\/\/s.w.org\/images\/core\/emoji\/2.3\/72x72\/1f94a.png\")
<\/strong><\/p>\nTrade and other international agreements<\/strong><\/h3>\n
<\/strong><\/p>\nCitizens\u2019 rights<\/strong><\/h3>\n
<\/strong><\/p>\nUK observer status<\/h3>\n
<\/strong><\/p>\nDivorce deal or nothing <\/strong><\/h3>\n
<\/strong><\/p>\n <\/p>\n
<\/a><\/h5>\n","protected":false},"excerpt":{"rendered":"