The delusion that the UK could leave the EU on 30/3/19 and be ready to generate and sign free trade deals with the rest of the world has long since died in the minds of all but the most devout Brexiteers as the complexity of the UK’s extricating itself from forty years of intimate economic connectivity with the EU dawns. Consequently, for quite some time now, the UK has sought a “transitional” period where it remains within the EU’s custom union and single market which gives UK and EU businesses time to set up for the subsequent trading relationship (still completely uncharted).
The EU and the UK have come to an agreement that will allow the UK to remain within the single market and customs union for a transitional period running from Brexit until the end of 2020, shorter than the two years the UK was asking for. It also appears to be a closed-ended agreement that does not envisage extension. During this period, the UK will continue to respect freedom of movement and has conceded that any EU national settling in the UK during the transition period will enjoy the same rights as those already there – Mrs May had insisted that this would not be the case.
The UK had been keen to re-assert claims to fishing rights within its territorial waters immediately after Brexit, but has capitulated to EU demands that the status quo will be maintained, although it will be consulted on fishing quotas during the period. The UK will no longer be an EU state during the transition, so it will lose its veto power and have no say in drafting EU directives whilst being bound to implement any new EU legislation.
The PM has also caved in on the status of Northern Ireland, agreeing that it will remain in regulatory alignment with the EU as a fall-back position should a comprehensive free trade agreement or technical solution not be ready to otherwise prevent a hard border on the island of Ireland. Last month, Mrs May stated that no British PM could agree to the backstop proposal as it risked the integrity of the UK; yesterday just such an assurance was given.
The agreement will need to be ratified by EU leaders and the EU parliament and, as it stands, 25% of the document has yet to be agreed. Even then, should talks break down over the UK end state arrangements, the transitional agreement would fall, so it provide no guarantees to anybody but is (at this stage) a strong statement of intent between the parties. It fails to please either the remain or leave camps, for obvious reasons, of course.