Brexit Phase 2 – the ‘transition’ begins

Following the Brexit referendum in June 2016, there was a nine-month pause for thought and a change of Prime Minister before, in March 2017, UK triggered the 2-year notice period for leaving the EU that is set out in Article 50 of the Treaty on European Union.

At 23:00 GMT on Friday 31 January, the Article 50 process was completed and the UK is no longer a member state of the EU – and the withdrawal process moved to a new constitutional phase – meaning that the new legal basis for our negotiations with the EU is “Article 218” of the EU treaties.  Expect to hear a lot more about Article 218 as it sets out the EU’s rules for conducting negotiations, in the coming months.

For the avoidance of doubt, Article 50 process is complete and final. It cannot be further extended, nor can it be reversed.

This brief insight on the transition period explains which elements of the UK’s membership of the EU remain the same during the transition period – which ends at 23:00 GMT on 31 December 2020.

A ‘transition’ – or ‘implementation’ – period was conceived to allow the UK and the EU negotiate a new relationship. It will last until the end of December 2020. Theresa May had originally agreed with the EU for the transition period to be extended for one or two years – but the Johnson Government has said it will not seek any such extension – and, in January 2020, legislated to prohibit itself from doing so.

From 1 February, the legal basis for negotiations between the UK and EU on the future relationship will be based on Article 218 of the Treaty on the Functioning of the EU – exactly the same procedures that apply to negotiations with other states that are ‘third countries’ to the EU.

During the transition period nearly all EU rules will continue to apply to the UK:

• The UK will still be part of the EU single market and customs union;
• Existing trade arrangements and rules for travelling within the EU will continue to apply;
• The jurisdiction of the Court of Justice of the EU in relation to the application of EU law in the UK will continue as before until the end of the transition period;
• The UK will continue to pay into the EU budget as part of the financial settlement that was set out in the in the Withdrawal Agreement.

The UK can no longer take part in EU decision-making:

• The UK will no longer be represented in the EU institutions from 1 February – and will not participate in EU decision-making.
• UK MEPs leave the European Parliament, and the UK loses its voting rights in the Council of the EU. It will be possible for UK representatives to participate in meetings of EU bodies where discussions are relevant to the UK. But the UK will not have voting rights in these meetings. The Withdrawal Agreement, for instance, identifies fisheries as a policy area where the UK will continue to be consulted.

Arrangements that have already ceased to apply include the following:

• Citizens – whist some of the rights relating to EU citizenship will continue for UK citizens during the transition period – including the right to freedom of movement across the EU – other rights will end at the beginning of the transition period. For example, UK citizens resident in EU Member States will lose the right to vote and stand in local and European elections.
• Justice – the UK will no longer have the right to opt into new justice and home affairs (JHA) co-operation measures. EU Member States may give notice that they will no longer surrender their citizens to the UK under the European Arrest Warrant (EAW). Thus far Germany, Austria and Slovenia have notified that they will not transfer their citizens to the UK under the EAW. They will still transfer other countries’ citizens. It is up to the UK to decide whether to reciprocate and say it will not transfer its citizens under the EAW to these countries.
• Security – the EU can exclude the UK from EU activities where participation would grant the UK access to certain ‘security-related sensitive information’.
• Foreign and Security Policy – the UK will not be considered as an EU Member State in relation to permanent structured co-operation – but may be invited to take part in EU initiatives. The UK will not be allowed to take various command roles within an EU governed force.
• Common Agricultural Policy – the UK left the CAP on Brexit day. The WA means some CAP payment regulations do not apply for 2020. The Government has legislated to allow direct payments to UK farmers to be made this year and is introducing a new UK farm support policy through the Agriculture Bill.
• The EU’s international agreements (including trade agreements) with 70 non-EU countries – apply to the UK until the end of the transition period. However, whilst the UK is bound by obligations stemming from the EU’s international agreements to observe the agreements until the end of the transition period – none of the 70 countries are themselves obliged to comply. The EU has notified these countries that the UK should be treated as an EU Member State for the purposes of these agreements – and the UK Government has published a list of countries that have ‘indicated’ they were looking to continue to treat the UK as an EU Member States for trade agreements during the transition period.  The UK is now permitted and free to negotiate and ratify new international agreements with non-EU countries – but these can only come into force at the end of the transition period. The UK has already opened negotiations with a number of non-EU countries on ‘continuity’ agreements that will replace the EU’s agreements on 1 January 2021.

We will report on the wider UK-EU negotiations and continue to focus on the significantly greater changes that are likely to come on 1 January 2021.

The nature of arrangements for other aspects of UK-EU relationship such as trade, travel, security collaboration and co-operation in other policy areas will depend on what is agreed during the transition period. Early indications in the opening positions of the parties gives little optimism for a comprehensive and binding agreement in time for ratification and implementation on 1 January 2021. In the next article, we will look at the legal frameworks under which the negotiations have to take place – and the constraints that these place on both the EU and the UK negotiating teams.