When it comes to Brexit, a key fear is that time is running out. From the moment the UK triggered Article 50, it had exactly two years to negotiate its exit from the EU. Five months to go and there is still no agreement. Meanwhile, the UK and the EU have barely begun discussing their future relationship.
Both sides agreed, in principle, to a transition period to allow more time. It would run from 30th March 2019 (that is, after the UK has formally left the EU) until the end of 2020 and can only happen on the condition that they have a withdrawal agreement in place. Now Theresa May is proposing a potential extension of the transition period by an extra year. There are many reasons why this could be complicated. But it is also necessary.
For starters, it is unclear that the UK parliament would support a longer transition period. Under the current proposal, the UK would effectively be a non-member: it would remain part of the single market and customs union, but would no longer be represented in EU institutions. It would still be consulted on new major EU legislation, but would no longer be able to vote. Meanwhile, the UK could still sign and ratify its own trade agreements—but these could only come into force once the transition period had ended. Hardly the “taking back control” some Brexiteers were hoping for.
There is also no guarantee that EU leaders would accept an extension on the same terms. The transition was supposed to end in December 2020—at the same time as the current five year EU budget. EU leaders are clear: if the UK wants to be part of the single market and customs union for longer, it will need to pay. How much is unclear. They would also almost certainly expect freedom of movement to continue for an extra year.
Then there are the EU’s trade partners. The EU is expected to send a letter to these partners asking that existing trade arrangements continue intact until the end of the transition; in other words, that they continue to treat the UK as party to these agreements even though it will have formally left the EU. While these partners are unlikely to object, they may try to extract further concessions from the UK, and even the EU.
Instead of extending the transition period, could the UK and the EU extend Article 50 negotiations? On the plus side, the UK would remain a member for longer giving it a formal say and vote over EU legislation. But it is difficult to see how negotiations could be extended for more than a couple of months. The European Parliament elections will take place in June 2019 so their vote on the withdrawal agreement would either have to take place before the current parliament dissolves or after the appointment of a new European Commission in the Autumn of 2019. Extending Article 50 negotiations beyond 2019 would be almost impossible; it is hard to imagine how the UK government could continue to vote in the EU Council, without British MEPs voting in the EU Parliament. This would not be great for checks and balances.
Extending the transition beyond 2020 is sensible. And despite the problems, it is a price worth paying. Trade negotiations are complex: the more sectors they cover, the greater the number of stakeholders. UK-EU trade talks will build on many smaller, internal talks between and within government, national parliaments, business communities, non-governmental organisations and the EU institutions so building in more time for consultation is both desirable and necessary. Plus, the more time businesses and government have to negotiate a new trade deal and adapt to a new legislative environment, the better. It would also minimise the risks of reaching the end of 2020 with no deal in place.
But any extension will need to take into account concerns on both sides to avoid the transition ending with no deal. For example, the EU could allow the UK to act as an observer during EU meetings—this would provide a more formal structure for the UK to voice its concerns about any new EU legislation that is likely to affect it during the transition. Meanwhile, the UK should agree to contribute to the new EU budget for the time it continues to access the single market and customs union. Recognising the political realities and constraints on each side would help build trust and to move things forward constructively.
