30 Jan 2018
ICOS Brexit Briefing
- EU27 ministers yesterday approved their negotiating position on a post-Brexit transition period. They are seeking a “status quo transition”, whereby the UK will be bound by all EU rules, but have no say in the EU decision-making process, for a period lasting from the UK’s exit on March 30, 2019 to December 31, 2020. Full details are below.
- Both sides aim to reach a political agreement on the transition before the next EU Council Summit, on March 22-23. At this meeting EU leaders then aim to formally agree to the deal, so that talks can begin on the framework of the future EU-UK relationship. Work has already begun internally in the EU27 on a position, which will be agreed by leaders in a supplementary document at the meeting.
- Speaking to stakeholders at the Irish Department of Agriculture’s Brexit Consultation Committee on January 18, Minister Creed stated that the department was focusing on providing input into this position. As agreed in December, the future relationship talks will have a specific Irish strand, focusing on issues such as the transit of goods and what regulatory alignment is needed to maintain North-South cooperation. The DAFM is also undertaking an analysis to determine by how much they need to expand their personal and electronic capacity to prepare for a change to customs arrangements in future.
- Meanwhile in London, pressure is building once again on UK Prime Minister, Theresa May, as her cabinet remains at ends over how to proceed with the Brexit talks, forcing her to put on hold plans for another big speech in which she would outline the UK’s position.
- Last night, Buzzfeed leaked a secret report compiled by the UK’s Department for Exiting the EU, which found in their assessment of the economic impacts of Brexit, that regardless of the shape of the future EU-UK relationship, the UK will be worse off outside the EU. In addition, it warns that any gains made from free trade deals with other countries would be minimal in comparison to what will be lost in EU trade. Read the report here.
Details of EU’s Position on Transitional Arrangements
EU27 ministers approved, at yesterday’s General Affairs Council, the EU’s negotiation stance for transition talks with the UK, once it leaves the EU on the 30 March 2019. The EU is seeking a “status quo transition”, whereby the UK will be bound by all EU rules and in turn would maintain all their rights under EU membership, except that they will no longer have a say in the EU decision making process. This will likely be the main bone of contention within the talks with the UK demanding to have a say on new EU laws during the period. EU Chief Negotiator, Michel Barnier responded to the demand yesterday, stating it was not possible to leave the EU and still enjoy it “à la carte”. Instead the UK would be consulted on decisions on a “limited, exceptional and a case by case basis”.
The EU’s proposal is for a transition period which would last until 31 December 2020. This marks the end of the current EU multiannual budget, for which the UK has agreed to uphold its committed financial contribution. While it would be possible to extend this transition period further, it would likely require the UK to make a financial offer in order to continue to access the single market and customs union.
ICOS has long called for transitional arrangements which will ensure no changes to customs procedures, are clear and are supportive of the current trade and supply lines. We fully support the EU’s approach, although we seek flexibility in the length of the transition period should it be necessary. While there is the difficulty that any extension of transitional arrangements would only risk further pushing out uncertainty for businesses, there is a greater risk if the UK was leave the single market and customs union, without a new relationship agreement being in force.
The EU position also seeks to extend citizens’ rights to freedom of movement throughout the transition period (originally agreed in December to end in March 2019 – a position Downing Street has already taken issue with.
Yesterday Barnier noted that as soon as the UK leaves the EU in March 2019, it will automatically lose the benefits of the 70 international trade access agreements the EU has with third countries, although it will be required, as a participant in the single market, to uphold their access to the UK market. The UK will therefore need to seek agreements with each of these countries to roll over its rights to access their markets during the transition period. While the EU position outlines that it is open to the UK entering discussions on trade with third countries and preparing for its own trade agreements, it will be required to seek “authorisation” from the EU for any binding agreements.