View from the UK: Brexit — What’s to Come in 2018?

Topics: Brexit, Client Relations, EU, Government, Legal Innovation, Midsize Law Firms Blog Posts, Thomson Reuters, United Kingdom


After Prime Minister Theresa May secured her mandate in December 2017 to move on to the second phase of Brexit’s Article 50 negotiations, the focus in 2018 will now shift to transition and the UK’s future outside of the European Union (EU).

However, with challenges at home and abroad, it will not be easy.

The start of the second phase of negotiations came on 15 December 2017, after the European Council adopted guidelines formally accepting that there had been ‘sufficient progress’ in the negotiations with the UK to proceed to the next phase. The key aims of the second phase are, most immediately, to address transitional arrangements, and, from March 2018, to have ‘preliminary and preparatory discussions with the aim of identifying an overall understanding of the framework for the future relationship’.

The overall aim of Brexit talks will be to conclude a formal withdrawal agreement governing the UK’s exit from the EU in March 2019. This will incorporate all the terms agreed in December 2017, as well as addressing many other withdrawal issues that were not fully resolved in the first phase, including the future of the Irish border, issues surrounding the governance of the withdrawal agreement itself, and the UK’s role in the European Atomic Energy Community.

It is likely that the withdrawal agreement will also cover the terms of the transition and it might also be accompanied by political declaration setting out any final understanding reached in the Brexit talks on the ‘framework’ for the future UK-EU relationship; however, the full agreement (or agreements) on the future relationship is founded on a different legal basis and will be finalised and concluded after the UK has left the EU.

The EU’s Chief Brexit Negotiator Michel Barnier has said that the EU would be ready to present an initial draft of the withdrawal agreement in early 2018. Both sides intend to agree on the final draft by October 2018 (to allow time for ratification by March 2019), which means there is an incredibly tight timetable for this year’s talks.

Avoiding a Cliff-Edge?

With just 15 months to go until the UK leaves the EU, David Davis, the Secretary of State for Exiting the EU, has expressed a desire to get the ‘outlines’ of an implementation period agreed in the first quarter of 2018. However, the UK would need to reach a legally binding agreement to give businesses absolute certainty on an implementation period, which Davis said could be as late as the UK’s exit date in March 2019.

Under discussion is a ‘standstill’ transition, which means that the UK will continue to participate in the customs union and single market during the transitional period. The EU has emphasised that all existing EU regulatory, budgetary, supervisory, judiciary and enforcement instruments and structures will also apply to the UK during that time, including the competence of the European Court of Justice and any changes to the EU Acquis.

The narrative of the transition — particularly a standstill one — is likely to be a contentious issue as the talks go on: hard-Brexiters are unlikely to be satisfied with a status quo period and will feel a sense of betrayal, while the softer-Brexiters and Remainers will feel there was no point to Brexit if there is a status quo minus an influential say on EU rules. From a legal perspective, it would also make more sense for the UK to leave the EU after the transition period.

You can read the full article here, plus more content on the Legal Solutions UK & Ireland blog