On Saturday, April 29, EU leaders from the remaining 27 Member States adopted negotiation guidelines for the UK’s exit from the EU.

The leaders strongly emphasises that a phased approach will be taken to the negotiations. This will begin with an exit deal, with the key priorities outlined as:

• Reciprocal and binding guarantees for EU citizens affected by Brexit in the UK and the EU.
• The settlement of the UK’s financial obligations, estimated to be between €60-100 billion.
• Maintaining the Good Friday Agreement “in all its parts”, with no return to a hard border on the island of Ireland. There is also a separate statement which clarifies that, should Northern Ireland ever in future vote in favour of Irish unity, it would be able to seamlessly re-join the EU.

These political guidelines were then developed into a legal negotiation directive, which will be submitted to EU ministers for approval on May 22. The directive is limited in scope to the negotiation of an exit deal, which EU Commission Chief Negotiator, Michal Barnier, has stated the aim of concluding as early as this coming autumn.

The directive outlines that a transitional agreement, for the time in-between the UK leaving the EU and the conclusion of a Free Trade Agreement, would be “identified at a later stage” when EU leaders believe sufficient progress has been made in achieving a successful exit agreement. From a business perspective, this transitional agreement is of critical importance. It is needed to ensure that industry has time to implement risk mitigation measures, such as adjusting supply chains, and finding new markets, before any changes to customs arrangements are introduced under the conditions of the future relationship.

ICOS calls for these discussions on a transitional agreement to begin as soon as possible, in order to provide clarity and certainty for businesses to plan for the future, and to maintain within the transitional agreement the current customs arrangements for a long as possible to give Industry the time needed to make the necessary changes.

By Alison Graham

European Affairs Executive