Brexit ‘transition’ deal could be ‘impossible’ to get, EU lawmakers say

13 February 2017. By Matthew Holehouse.

Securing a "transitional" agreement for EU-UK trade could be "impossible," because the bloc's governing rules don't allow such deals, European lawmakers have warned in a report seen by MLex.

Setting up an interim accord would be a lengthy process that would give EU member states and national parliaments a right to veto, said the report by the European Parliament's Committee on Legal Affairs.

Such an agreement is "difficult, if not impossible" to reach within the two years granted for negotiations by Article 50, the EU exit clause, committee chairman Pavel Svoboda said in a foreword to the report.

If the EU institutions follow this interpretation, the UK risks exiting the bloc without a trade arrangement. The bloc would impose tariffs on goods and cross-border agreements covering the flow of data and cooperation in civil cases or aviation would expire.

Article 50 states that EU institutions can take "into account the framework for [a] future relationship." But they can't define future trade relations during exit negotiations, the lawmakers said.

"This means that transitional arrangements could not be included in the withdrawal agreement," the report read.

A transitional deal could end up being in place for longer than expected if negotiations drag on, and this would undermine the spirit of Article 50 designed to end membership within two years, the report said.

The EU could amend Article 50 to permit a transitional deal, but this would be a lengthy process.

Alternatively, the UK and the remaining EU states would need to sign an international accord during the two-year exit period. All EU countries would have to agree to the terms of this deal, and the EU's Court of Justice would probably examine it, too. National parliaments would need to ratify the agreement.

	Eliot Gao