UK politics: Quick View - UK and EU set negotiating lines on Brexit transition period
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- Economist Intelligence Unit
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- International Relations, Politics, News Analysis, Forecast
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- United Kingdom
On January 29th the European Council approved EU negotiating directives on the terms of a transition period after the UK's withdrawal from the EU at end-March 2019. The UK government set out its own negotiating lines in an open letter to business leaders on January 26th.
The EU has proposed that the UK continues to participate in the customs union and single market for a transition period, during which all EU laws will apply and the UK will remain bound by obligations stemming from EU agreements with "third countries". However, the UK will become a third country itself and so will lose representation in EU institutions and bodies. The directives also propose that the provisions on citizens' rights in the withdrawal agreement apply from the end of the transition period, no later than December 31st 2020.
Owing to the EU's red line on "cherry-picking" from its four freedoms, the latter proposal effectively extends free movement of labour to the UK for the duration of the transition. However, the UK prime minister, Theresa May, has revealed that the UK will contest the proposal, arguing that the citizens' rights agreement should instead apply from March 2019. Disagreement on this issue poses the biggest threat to successful negotiations in the coming weeks. The UK government has promised "no new barriers" for EU citizens wishing to take up employment in the UK during the transition, but it would like to introduce a registration scheme for new arrivals in preparation for a new immigration system.
Most other EU proposals should be broadly acceptable to the UK. The UK will not be able to implement new trade deals with non-EU countries without the EU's authorisation, but it should be able to negotiate them, and there are suggestions that this authorisation may be forthcoming in cases where the UK is "grandfathering" an existing EU agreement (allowing old rules to continue under new arrangements).
Meanwhile the UK's Brexit secretary, David Davis, has called for a "right to object" to new legislation if it were to put UK industry at a disadvantage. The UK would also prefer that the transition (or "implementation") period last for two years, and that the country maintains its say in setting fishing quotas.
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