Policy briefing by Mogens Peter Carl, Senior Counsel at Gide Brussels, former director-general of the European Commission's Directorate-General for Trade and Directorate-General for the Environment, published in March 2018 by Friends of Europe.

The focus of this paper is on what needs to be agreed by 31 December 2020, when the transition period ends. For an excellent analysis of the questions that need to be addressed during the transition period, see a recent publication by the Jacques Delors Institute.

This paper demonstrates the feasibility of an innovative approach to ease the way forward and avoid some of the most disrupting consequences of the 31 December 2020 cliffhanger. In particular, it focuses on what could be done to postpone the re-imposition of “hard borders” between the EU and the UK, and therefore also between the Republic of Ireland and Northern Ireland, by agreeing on a number of difficult, connected issues.

Overview

In one year, the United Kingdom will leave the European Union. In order to come to an agreement on post-Brexit relations, the two parties have agreed on a “freeze” the current situation from that point until 31 December 2020. Until then, everything will continue as before, with one major difference: the UK will, after 29 March 2019, no longer be allowed to participate in EU decision making.

An agreement on citizens’ rights and the UK’s “exit invoice” was treated as a precondition to trigger further negotiations – some sort of agreement may also have been reached on the “Irish border issue”.

But what now? Will it be possible in the next two years and eight months to agree on the long list of remaining issues, such as our future relations in the main areas covered by EU law and agreements laboriously negotiated over the past 45 years? The suggested answer is “yes …but”. This paper - and the cautious “yes …but” - is exclusively focused on the “commercial” relationship between the two parties, namely trade in goods and services.

There are four reasons for writing this paper, one year after suggesting a blueprint for post Brexit relations1:

1. Important decisions regarding investment are being postponed because of the impenetrable London fog surrounding the British government’s approach to basic issues, like its preferred future trade relations with the EU. This is, inter alia, aimed at those whose economic interests are at stake, i.e. traders, investors, and producers. One may hope that officials on either side may also find some inspiration here.

2. The UK and the EU have agreed that they should avoid the creation of a “hard border” between the Republic of Ireland and Northern Ireland. This adds a major problem that must be resolved.

3. The apparent impossibility of hiring and training enough qualified UK customs officials by 1 January 2021 will create an enormous problem with the prospect of long delays and disruption of supply chains.

4. Time will be required to solve these and other problems. Some have expressed the hope that the UK could be granted yet another transition period. This is highly unrealistic: why should the EU agree, and how could this be acceptable to Brexiteers, given that the UK will lose its right to participate in EU decision-making on 29 March 2019? Any delay beyond 2020 would only prolong that very uncomfortable position for the UK, subject, as it would be, to decisions made in Brussels five years after the referendum.

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