18 Oct 2018

Transition extension: why, and will it work?

The possible extension of the transition period opened up today in Brexit discussions signals the start of a massive, new, lengthy workstream.

The EU’s chief negotiator, Michel Barnier, has suggested an extension of the transition by up to one year beyond December 2020 (the UK government is emphasising “a matter of months”). This is to get a UK-preferred backstop, a UK-wide Customs Union arrangement, through the EU’s legal apparatus.

The senior figures in the UK Brexit team have all accepted the EU27 argument that the nature of a Customs Union requires lengthy talks and ratification procedures. The EU27 insist that it cannot be done in the current transition duration and that the UK needs to show some flexibility. The UK’s official position is that the existing timetable will work, no extension will be possible, but if you want us to show flexibility we will.

Mrs May’s own ministers require this temporary Customs Arrangement to have some kind of break clause. Tory Brexiteers want to be assured that it will not be a trap into which the EU lures the UK, never to leave. Mrs May in the Commons on Monday signalled what kind of formulation might be worked on to satisfy those Brexiteers: there would be an obligation on both sides to keep the plan temporary and properly engage in talks to make that happen.

We are talking about a contingency extension plan to the temporary standstill provision to enable lengthy additional talks and ratification alongside hugely challenging parallel trade agreement talks to make a guaranteed safety net provision non-operative.

If Michel Barnier continues to believe that this approach is worth pursuing, all the signs are that the EU leaders will continue to trust his judgement and let him continue pursuing this path. But there is a lot of eye-rolling around delegations here, mounting frustration and, you have to think given the EU’s past record on treaties, no guarantee of success.

And that’s before you start assessing the sulphurous reaction off Tory back-benchers in Westminster. Mrs May is trying to stretch the elastic when it sounded like it had already pinged. But if she can survive the badly landed announcement of a possible extended transition period and regroup and convince ministers that this is the only way of achieving their stated goals, her hope must be that at some point she can sell this as a breakthrough and some kind of British “win”.

The EU version of the backstop – putting Northern Ireland under EU Customs Union and Single Market rules while the rest of the UK leaves – would still be enshrined in the A50 Treaty but could be supplanted in practice by a bigger, UK-wide temporary Customs Union arrangement. There would still be the problem of Northern Ireland staying under Single Market rules, all be they under a carefully scaled back regime of checks and inspections. One DUP MP told me that his party could, under the right conditions, live with that, though he accepted that his party is troubled and not exactly homogeneous right now. Tory rebels have had their anger fed but their options haven’t got any more appealing.

Theresa May has now left the building allowing the EU27 to discuss some more matters that she’s no longer entitled to join in on. On Monday she must report back to the Commons on where things are now going and will need to reassure baffled and angered allies and critics alike how talk of a transition extension could make sense.

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