Economy

European leaders mulling talks on Brexit transition period

EU may make minor concession to UK on Michel Barnier’s negotiation mandate

Brexit talks may include discussion of UK’s preferred two-year transition period. Photograph: Stefan Rousseau / PA

Thu Sep 28 2017 - 12:55

EU leaders are considering going some way to meet one of the UK's demands, signaling a minor breakthrough in Brexit talks after three months of scant progress.

While the European Parliament will call on leaders not to move talks on to the crucial trade deal at a summit next month, according to a draft resolution, European leaders are considering bringing forward talks on the transition period that will follow Brexit, according to people familiar with the situation.

The concession from the EU, while minor, would break the deadlock and make it easier for the UK to discuss the contentious divorce bill.

It would also be a sign that prime minister Theresa May’s speech last week in Florence, where she pledged to continue paying into the EU’s budget for two years after leaving, hit some of the notes her European counterparts were hoping for.

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With just 18 months to go before it leaves the club, the UK needs to get the terms of the transition agreed in order to mitigate the uncertainty facing businesses, some of which are already relocating.

Ms May said in Florence she wants a two-year transition during which trading terms remain unchanged. The quid pro quo is that the UK must accept all of the EU’s rules while losing any say in how they are made.

The concession on transition would happen at the EU summit in October, where leaders may discuss changing the mandate of chief negotiator Michel Barnier to allow him to talk about the bridging arrangements alongside the divorce, according to the people.

Governments are also considering whether to add language in their summit statement that assures the UK they are likely to accept a transition period, one of the people said.

Initially, Mr Barnier insisted that transition could only be discussed after the separation terms and the outline of the future trade relationship were agreed. He signaled on Monday that his mandate could be revised, but it would be up to EU leaders.

The two sides remain far apart on key issues, such as the role of the European Court of Justice, and that was also highlighted by the resolution of the European Parliament.

Useful talks

Mr Barnier said on Thursday that it will take “weeks or months” before Brexit talks can move on to trade, even as he welcomed a new “dynamic” in negotiations this week.

Ms May's speech "made it possible to unblock the situation," Mr Barnier told a news conference in Brussels after the latest round of talks. But the two sides remain divided on the bill and on the role the European Court of Justice should have after Britain leaves, he said.

Mr Barnier said “useful” talks had been held over the financial settlement, but clarity was still lacking.

“The UK explained also that it is not in a position yet to identify its commitments,” he said.

“For the EU, the only way to reach sufficient progress is that all commitments undertaken at 28 are honored at 28,” he said, in a reference to the number of EU members.

One more round of negotiations is due in early October, before leaders meet in the middle of next month. At that summit they will decide whether talks can move on to trade, and may discuss whether talks on the transition deal can be moved forward.

Veto powers

The assembly, which has veto powers over the final deal, wants the ECJ to have jurisdiction in the UK during any transition, which Brexit secretary David Davis ruled out as recently as last weekend. It also wants freedom of movement during the transition, while the UK wants to register Europeans entering Britain after 2019.

Ireland, which will become home to the UK's European border and wants as long a transition as possible, said today the transition could last as long as four years.

EU governments must approve the UK’s plans for a transition, and it can happen only if the two sides strike an overall deal on the British departure before March 2019.

They still insist that talks must show “sufficient progress” on the three main separation issues of the bill, the rights of EU citizens in the UK and the Irish border before negotiations can start on trade. The definition of “sufficient progress” has always been open to interpretation.

- Bloomberg

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