Trade

Barnier’s Brexit timeline: No transition deal until October 2018

STRASBOURG — A Brexit transition deal between the EU and the U.K. will not be formalized until October next year, according to a document prepared by EU Brexit negotiator Michel Barnier.

Under a best-case scenario in which EU leaders decide in December that sufficient progress has been reached in the Brexit talks to move to the second phase, a “tentative timeline” for the talks laid out in the document indicates that negotiations on a transition will not begin until around February next year.

They would then proceed in parallel with “preliminary and preparatory discussions” on Britain’s future relationship with the bloc, culminating in a deal to be finalized at the October 2018 European Council summit with a “political declaration on future relationship.” That would leave time for ratification by national parliaments and the European Parliament before the U.K.’s leaving date in March 2019.

This model of transition will likely reassure most U.K. businesses but the timetable on page two of the document will ring alarm bells.

The 14-page document circulated by Barnier on Tuesday to members of the European Parliament’s Brexit steering group in a technical seminar and seen by POLITICO also confirms that the EU Brexit chief would be prepared to push for a “stand still” transition in which the U.K. remains in the single market and customs union and under the jurisdiction of the European Court of Justice. It makes clear that Britain would have “no institutional rights” during that period, meaning that it would have no political presence in the European institutions and no voting rights in the Council.

This model of transition will likely reassure most U.K. businesses but the timetable on page two of the document will ring alarm bells. They are desperate for more clarity about the regulations they will need to operate under once the U.K. leaves. Without that clarity, many threaten to trigger plans to relocate parts of their operations to the EU27 or redirect investments.

Speaking in October, U.K. Chancellor Philip Hammond spoke for many businesses when he said a transitional deal was a “wasting asset.”

David Davis, the U.K. Brexit secretary, told MPs last month he believed a “quick” transition agreement could be done by “December or thereafter,” with talks then progressing to a trade deal with the EU. But Barnier’s document suggests that under the EU framework, the talks on transition and the “framework for future relationship” — meaning everything from trade to defense — would start early next year and proceed in parallel with transition talks, rather than one following the other.

The document does not specify how long a transition would last — May proposed around two years in her Florence speech in September — but it does make clear that in the Commission’s view, any extension of the period would only happen on the EU27’s terms. The document says that an extension would only be granted if it was “necessary, legally feasible, [and] in the Union’s interest.”

David Davis told MPs last month he believed a “quick” transition agreement could be done by “December or thereafter” | Jack Taylor/Getty Images

It also specifies the level of participation that the U.K. can expect during a transition. “General rule: the U.K. no longer participates in the work of the Union bodies or organs during the transition period,” it states, although it lists two exceptional categories where the U.K. would be granted observer status. These are where the U.K.’s participation as an observer is relevant for the implementation of EU law and where the proceedings concern the U.K. specifically. Both the examples cited by the document — a committee on VAT and another on competition — are advisory bodies that have no decision-making powers.

Despite the U.K.’s dominant position on defense because of its well equipped military and U.N. Security Council seat, there is no mention of any special status for the U.K. on defense matters.

A separate document seen by POLITICO makes clear that given London’s rejection of single market and customs union membership, Brussels believes that a Canada-style trade deal is the only realistic model for the U.K.’s future relationship with the EU.

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