Boris Johnson has this week returned from Brussels with a new withdrawal agreement, which may well reduce the chance of an imminent no-deal Brexit.
Eurosceptic Conservative MP John Baron has already turned his attention to the next phase of the Brexit saga. This morning, he called on the Prime Minister to abandon future talks if a free trade deal is not agreed with the EU by December 2020.
His comments highlight something that many people outside the Westminster bubble may not have realised yet: even if Boris Johnson gets his withdrawal agreement through parliament, there’s another no-deal threat on the horizon.
This is only the first of two deals
The deal we’re currently agonising over is the first of two that we will be trying to strike with Brussels.
The current deal — the “withdrawal agreement” — is about what happens in the immediate aftermath of the UK’s departure.
Once we leave, we’ll be straight into round two: negotiations for a deal to cover our long-term future relationship with the EU. This is what commentators mean when they refer to a “free trade deal” with Europe.
Free trade deal negotiations will formally begin in the “transition period,” which, if Boris Johnson’s withdrawal agreement goes ahead, will start on 31 October. The transition period is strictly time-limited: it cannot go on indefinitely.
This means that even if the withdrawal agreement (the thing we’re currently obsessing over) gets through parliament, we’ll very soon be facing another no-deal deadline: the possibility of ending the transition period without a future relationship deal in place.
Can’t we just roll them into one?
But hang on, why do we need a transition period? Can’t we just negotiate the terms of our future relationship right now and roll the two deals together?
For starters, trade deals can take years to negotiate. It’s hard to imagine any of the major pro-Brexit parties seriously advocating delaying our departure for that long.
And it’s very difficult for the UK to strike a free trade deal with the EU while we’re still part of the trade bloc. Explaining the rationale for the transition period, Theresa May said in 2017 that the EU is “not legally able to conclude an agreement with the UK as an external partner while it is itself still part of the EU.”
This is in line with Brussels rules that stop member states from striking their own free trade deals: the whole idea of the EU is to present a united front to other countries and trade blocs around the world.
Hence the withdrawal agreement creates a transition period where EU regulations still apply (and therefore UK and EU businesses don’t freak out), but we’re able to properly hammer out our long-term relationship because we’re no longer a member.
What’s the timeline?
If we leave the EU on 31 October 2019 with Boris Johnson’s withdrawal agreement, we’ll find ourselves automatically in the transition period, and we’ll have nine months to get cracking on the future relationship deal.
The withdrawal agreement says that if there hasn’t been sufficient progress by July 2020, and we think that it’s unlikely to be finalised by the end of the year, the UK and EU can agree to extend the transition period by “one or two years.”
As it stands, this is a one-off extension. If there’s no future relationship deal in place at the end of the transition period, the UK will face a “cliff edge.” Overnight, we’ll go from being covered by EU rules and treaties in the transition period to nothing at all.
In other words, the UK could face a second no-deal deadline in the next three years.
So if you were hoping that the Brexit saga might be over by the end of this month, we’ve got bad news: whether we leave with Johnson’s deal, another deal, or no deal at all, Brexit will be dominating UK politics for years to come.