Businesses Respond Positively to Transition Deal: Brexit Update

Updated on
We were able to agree on a "large part" of the Brexit treaty, Barnier tells reporters.

The U.K. and EU have reached a deal on the transition agreement that businesses are keen to get pinned down for the period immediately after Brexit.

Brexit Secretary David Davis and chief EU negotiator Michel Barnier briefed reporters in Brussels. Leaders are expected to sign off on the agreement at a summit on Thursday and Friday.

The U.K. has been trying to secure a written promise from the EU about the transition agreement, according to a person familiar with the situation. Businesses are cranking up the pressure to make the transition as solid — and useful — as possible. They are becoming increasingly aware that any agreement reached at the summit this week will be a political commitment — not legally binding until the final withdrawal agreement is signed early next year.

We are following developments as they unfold. Time stamps are London time.

Businesses Welcome Agreement -- With Caveats (1:07 p.m.)

“Business leaders will welcome the announcement of a provisional agreement on an implementation period and congratulate the U.K. government for heeding the call of business and making it a priority early on,” Allie Renison, head of Europe and trade policy at the Institute of Directors, says in statement. “We are, however, concerned that not enough attention is being given now to the finer details and practical implications of transition.”

But the British Chambers of Commerce was more positive. “While some companies would have liked to see copper-bottomed legal guarantees around the transition, the political agreement reached in Brussels is sufficient for most businesses to plan ahead with a greater degree of confidence,” BCC director general Adam Marshall says in a statement.

It’s also noticeable that the pound has risen significantly against the dollar.

Davis Wants Talks on Future Partnership in April (12:38 p.m.)

Davis wants talks on a trade deal to begin as soon as possible, pointing out that it can’t be signed until after the U.K. actually leaves the bloc. “The most important thing is we need to get on with this now,” he says.

Barnier warns that there’s “a considerable amount of work” to do.

Barnier, Davis Say Gibraltar Leaves EU With U.K. (12:25 p.m.)

Both Davis and Barnier say negotiations are ongoing with between the U.K. and the Spanish government on Gibraltar. Barnier adds that EU member states have indicated their solidarity with Spain’s position.

Davis Says ‘Good Deal Closer Than Ever Before’ (12:21 p.m.)

Davis’s tone is bullish, including on finding a solution for Northern Ireland. “While there’s no agreement on the right operational approach, we know what we need to do and we are going to get on with it,” he says.

On the transition agreement: “It’s December 20, and yes it’s 21 months, which is near enough to the two years we asked for.”

Davis, Barnier Differ on Business Certainty (12:12 p.m.)

David Davis says the transition agreement means businesses now have certainty about the period immediately after Brexit; they can go ahead with investment decisions and be sure there’s no disruption. But Barnier repeated his warning that the transition only becomes a certainty when the final withdrawal agreement is ratified.

Barnier: No Agreement Yet on Northern Ireland (12:03 p.m.)

“We must have a workable and practical solution to avoid a hard border and protect north-south cooperation,” Barnier says. The EU and U.K. agreed to include in the text published today a note on how the Irish issues will be dealt with.”

Barnier says both sides have agreed that the backstop solution for Northern Ireland -- full regulatory alignment with the EU -- must form part of the legal text of withdrawal agreement. Detailed talks on Northern Ireland will take place in coming weeks.

“We are ready to look at all options which allow us to meet our objective in a constructive way,” Barnier says.

Barnier Says Brexit Transition Will Be Time-Limited (12 p.m.)

“The transition will be of limited duration as was requested by the government of the United Kingdom and by the European Union,” Barnier says. Period will be used to finalize future relationship, a period that will be “intense and demanding.”

Barnier Says Large Part of Exit Deal Agreed (11:55 a.m.)

The transition deal has been agreed, and Barnier says a large part of the final exit treaty has also been settled. But he says there’s still much work to do.

Barnier and Davis speak in Brussels, where Barnier presents a chart of all the areas where agreement has been reached.

Transition Deal Reached (11:20 a.m.)

The European Commission will publish an annotated version of the Withdrawal Agreement with color coding later on Monday, according to an EU official familiar with the matter.

Citizens’ rights, the financial settlement and transition will all be color-coded green to mean agreement has been reached, according to the official.

Transition Terms Agreed, Awaiting Sign-Off (10:50 a.m)

U.K. officials consider the terms of the transition to have been agreed, and it’s just awaiting sign-off from Davis and Barnier, according to two people familiar with the situation.

Negotiators have been working through the weekend.

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