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As we have reported previously, the result of the European Union referendum (Brexit) was announced on 24 June 2016 with a vote in favour of the United Kingdom exiting.
We have issued a series of Brexit updates since the date of the referendum. To access such prior alerts, please visit our Brexit page.
UK and EU agree terms for Brexit transition deal
The UK and the EU have agreed on a “large part” of a draft withdrawal agreement (“Withdrawal Agreement”), which broadly sets out the terms of a transition period prior to the UK’s departure from the EU.
However, the terms of a future trading relationship between the UK and the EU following the end of the transition period remain to be agreed.
The Withdrawal Agreement was announced jointly by Michael Barnier (the EU’s chief negotiator) and David Davis (the UK’s Secretary of State for Exiting the European Union) in Brussels on Monday 19 March 2018. Mr Barnier emphasised that the agreement is currently not legally binding and that “legal certainty…will only come with the ratification of the Withdrawal Agreement on both sides”.
Key terms of the transition deal
- The transition period is due to last 21 months (from when the Withdrawal Agreement enters into force on 30 March 2019) and effectively extends the UK’s participation in the EU single market and customs union until 31 December 2020.
- The UK will retain the benefit of existing EU trade agreements with other countries until the end of the transition period. Mr Davis commented that this provision will provide “certainty” for businesses and ensure that there will be no disruptions to existing trade relationships as the UK prepares to exit the EU.
- The UK will also have the ability to negotiate and sign its own trade deals with third countries during the transition period, provided that such deals will only take effect once the transition period ends.
- Freedom of movement will effectively continue until the end of the transition period. EU citizens and UK nationals will also have the right to permanent residence provided they meet certain requirements as set out in the Withdrawal Agreement.
- The European Court of Justice (“ECJ”) will continue to have jurisdiction over matters relating to EU law during the transition period. It is still to be agreed between the UK and the EU the role that the ECJ will have following this period.
- The UK and the EU will also need to come to an agreement regarding the future status of Northern Ireland. To avoid a hard border between Northern Ireland and the Republic of Ireland, the Withdrawal Agreement provisionally states that Northern Ireland will effectively stay in parts of the single market and the customs union to maintain regulatory alignment. This “backstop” measure will apply unless and until another solution can be agreed between the UK and the EU.
