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UK Prime Minister Theresa May speaking at the Confederation of British Industry’s annual conference on Monday hinted that her government was working towards avoiding a “cliff edge” for business when Britain’s two-year Brexit negotiating period comes to an end. May raised the prospect of the UK entering a transitional Brexit arrangement with the rest of the European Union in 2019.
The transition plan was recommended by the think tank Open Europe in August. Though the Government did not divulge details about the arrangement, it is widely presumed to involve Britain leaving the EU, as planned, in 2019, but immediately entering a close trading relationship with the rest of the bloc, such as Norway has as part of the European Economic Area [EEA].
Businesses are clamouring for a transitional deal because at the end of the two-year negotiation period the UK will automatically exit the EU, when some fear the country could face a cliff edge under which it would suddenly have to start dealing on unfavourable WTO terms. Businesses were hoping for some deal which could see preferential trading terms and some form of free movement retained while negotiations continue.
Theresa May has been warned by European politicians and experts that seeking a transitional Brexit deal with the EU would be “fiendishly difficult”. The EU will insist that the UK accept free movement and European court of justice rulings during the transition, but that may be politically unacceptable for May.
“A spokesperson for Prime Minister May has since declined to say whether the government will be seeking a transitional arrangement saying only that there’s a wide range of issues” that would need to be worked through during Brexit negotiations. However, the spokesperson did make it clear that the UK government will not be seeking to extend the Article 50 process beyond the two year period and reiterating that Prime Minister May wants the UK to leave the EU by the end of March 2019 as the latest point.”
