Tin hats at the ready: the clock has officially started ticking.
Article 50 will be triggered next Wednesday (29 March). The UK has 739 days left in the European Union.
According to Plan A, at least.
Already speculation is rising that, behind the scenes, the government is preparing for a rather longer separation period than the two years intended under the Lisbon Treaty. Politico reports officials from the Department for International Trade are exploring a transitional deal between the UK and the EU, under which tariffs could be kept at zero for up to 10 years.
It’s not hard to see the potential appeal. A report from the House of Lords EU committee, published last week, urged the government to pursue a transition arrangement with the EU to help buy more time for trade negotiations and give businesses a more generous “period of adjustment” to life post-Brexit.
Crucially, an interim arrangement would allow the UK to avoid a ‘cliff edge’ scenario on trade come March 2019, when (based on the current schedule) it is set to exit the single market. If no free trade deal with the EU is in place by then, World Trade Organization rules will start to apply – with costly implications.
Not that a lack of tariffs alone will be enough to soften the Brexit blow. “Leaving the EU customs union would result in costly administrative requirements and customs procedures, whatever new framework for trade is established,” the House of Lords report warned. “This would result in a significant additional administrative burden for companies, and delays to consignments of goods, incurring additional costs.”
Then there is the gnarly issue of freedom of movement and continued access to labour. We wrote two editorials about this last week alone (our editor’s leader column and this blog) because there’s just no way to overstate the importance of this. The UK food & drink industry is staring down the barrel if it isn’t allowed to recruit the staff it needs – and there’s growing concern government ministers are not taking the issue seriously enough.
Plenty to sort out in the next two years, then. Of course, the UK cannot expect the coming negotiations to be easy. Indeed, Jean-Claude Juncker this weekend predicted no other member state would be tempted to try their own version of Brexit once they see how crummy a deal the UK is going to get. “They will all see from the UK’s example that leaving the EU is a bad idea,” he told Germany’s Bild am Sonntag.
Sabre-rattling? Perhaps. But you wouldn’t want to bank on it. Better make every one of those 739 days count.
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