Brexit negotiations continue to march falteringly forward. In their latest step, discussions will focus on the transition period after the United Kingdom departs from the European Union in March 2019. Though both sides are eager to make progress, the set of conditions the continental bloc announced Jan. 29 suggest there will be stumbling blocks on the way to an agreement.
The union accepted Britain's request to remain in the single market (the area where goods, people, services and capital move freely) during the transition period, and suggested that the period conclude on Dec. 31, 2020 — the day the bloc's current multi-annual budget ends. Should the United Kingdom remain in the single market after that day, it would be required to contribute to the next multi-annual EU budget, something London has opposed.
Additionally, the union's conditions allow the United Kingdom to negotiate free trade agreements with non-EU countries during the transition period, though they require the country to get EU authorization to implement any deals. This is key for Britain, which wants to start negotiating trade agreements as soon as possible. Finally, the European Union reminded the United Kingdom that the problem of the Irish border has not really been solved. Although the United Kingdom and the union signed an agreement in December 2017 to keep an open border between Northern Ireland and the Republic of Ireland, Britain and the bloc have not yet been able to figure out how to make that happen.
Keeping the United Kingdom in the single market during the transition will create problems, such as deciding the rights of EU nationals moving to the country after Brexit. London has said it will give the right to work and reside in the United Kingdom to all EU citizens who arrive before the official Brexit in March 2019, but the European Union wants London to give the same rights to those who arrive during the transition period as well, despite opposition from hard-line Brexiteers. Furthermore, some British officials have expressed concern that if the United Kingdom remains part of the single market for a period after Brexit, it will be excluded from the European Union's policy-making process while still being subject to any EU rules that may affect its interests.
The European Union wants to settle the details of the transition period by March, with the hope that negotiations about future trade ties would immediately follow and be completed by October. But officials from the bloc have said that London's lack of clarity could postpone this deadline. Meanwhile, an internal document by the British government leaked to the media on Jan. 29 stated that all three post-transition Brexit scenarios currently on the table — leaving the union without a trade deal, signing a comprehensive trade agreement with the bloc, and remaining in the single market after the end of the transition period — would have a negative impact on the British economy. The document even suggested that permanent membership in the single market would be the least negative option from an economic standpoint. Whatever the outcome, the United Kingdom will be anxious to minimize the future impact on its economy.
