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EPA/Olivier Hoslet

Brexit transition deal: conceding on the possible in hope of the hypothetical

Politics is very much a game of timing. And time is definitely of the essence in the negotiations between London and Brussels over how the UK should leave the EU. In the latest instalment of the talks, both sides have agreed to buy time to delay the moment the UK loses a host of rights and obligations stemming from EU membership. The withdrawal agreement – if completed successfully prior to the moment the UK officially leaves the EU at 11pm (GMT) on March 29 2019 – will now incorporate a 21-month transitional period. This entails extending the applicability of EU policies and associated law, which includes free movement of people alongside that of goods, services and capital, until the end of 2020.

The UK’s official departure date is regulated by Article 50 of the Lisbon Treaty, unless there is a deus ex machina in the form of the government requesting to cancel Brexit. But Prime Minister Theresa May has sought to postpone when Brexit really takes effect by up to two years. The official message is that this hiatus allows businesses and individuals on both sides to adjust to the changed rules that will follow from an eventual free trade deal.

In reality, transition is an admission that the UK government is not prepared for the consequences of Brexit, politically or economically. There is no replacement arrangement for trade or immigration rules, among many other issues. The cabinet still does not have a common position on what the future EU-UK relationship should look like. This explains Angela Merkel’s joke that the UK acts like a bad mafia boss saying “make me an offer” when in fact the offer needs to come from London.

The original wishlist

Time has effectively run out for negotiating the outline of a free trade agreement within the framework of the Article 50 talks. The EU made it clear that to ensure ratification the final withdrawal treaty needs to be done and dusted by October 2018. That’s unrealistic given that finalising the legal text for the issues already concluded in theory in December is proving problematic because the UK has not resolved how it wants to prevent a hard border in Ireland.

Playing with time is convenient for the EU too. The next European parliament elections are due in May 2019, so it’s essential for the formal Brexit to take place beforehand. There is no desire on either side of the Channel to prolong UK participation in EU decision-making institutions.

Negotiating a mutually desirable standstill arrangement was nonetheless quite fraught. The UK initially argued that it should be allowed to diverge from EU rules during transition. In January the government articulated a set of wide-ranging demands to cushion the initial economic impact of Brexit and render this halfway house politically more palatable by limiting restrictions on British sovereignty. The UK wanted to distinguish between the rights of European citizens arriving before and during transition, along with the ability to influence new laws adopted during transition. It also wanted flexibility to negotiate free trade agreements (FTAs) with other countries at the same time as wishing to remain bound by existing EU FTAs. Fish also entered the picture after environment secretary Michael Gove called for leaving the EU fish quota system sooner rather than later.

Key concessions

What became of these demands? The text covering the transition period includes a clause confirming that the UK can negotiate and ratify trade deals with other countries. However, they must not enter into force prior to 2021. There is also a footnote enshrining EU support for the UK policy of “rolling over” existing EU trade deals with countries such as South Korea or Canada so that these continue to apply to British goods and services.

Fish: back on the Brexit menu. EPA

Fish allocations decided in Brussels will apply for the duration of transition, although the UK will be consulted when these are renewed again in 2019. EU citizens will be treated equally regardless of whether they arrived before or after Brexit day, just as UK citizens who move to the EU prior to the end of transition.

Thus the deal reflects a number of compromises made under time pressure. It is important to remember that transition is the possible in the hope of the hypothetical. That is, the 21-month standstill is not automatic – it will only apply if both sides ratify a more comprehensive withdrawal treaty by October. Equally, both sides have bought time for a hypothetical FTA that can settle the more thorny and detailed issues of trade. That extra time will count for nothing if issues of how far the UK is to diverge from the EU cannot be resolved within the cabinet and parliament at large. So the politics of Brexit will continue to drag on.

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