The BREXIT Bulletin: The year Brexit will begin to bite
Welcome back from the New Year break.
As we stand, we are at stage 1.5 of the Brexit negotiations.
Transition talks will begin imminently, but looming in the background are the still as yet unsolved issues of the Irish border, the "divorce bill", and citizens' rights.
"Sufficient" progress may have been achieved for the EU, but these issues have not concretely been put to bed, nor was progress deemed sufficient on a number of other 'separation issues' including the status of goods, data protection, and ongoing customs procedures.
Looking further ahead, we can expect trade talks to begin around March, although again labelling them 'trade talks' is a misnomer. The framework of a trade agreement will be discussed, but the details will almost certainly be left to a later stage, most likely during the transition.
In any case, there can be no EU-UK trade deal until the UK has formally left transition and the jurisdiction of the acquis communitaire.
So what will 2018 bring?
Michel Barnier has stated that the Withdrawal Agreement (phases 1 and 1.5) should be agreed by October 2017 to enable sufficient time for the European Parliament to grant its consent, for the sign off by the Member States in the Council, and for the UK Parliament to ratify the text.
Trade talks will almost certainly continue into transition, but there may already be political agreement on the framework of the future trading relationship by October.
Transition, when it comes, is likely to be a status quo transition, as requested by the EU. The UK still appears to harbour some illusions about being able to conclude trade agreements with other third parties during this period - but whilst it can launch discussions, it cannot conclude any until it leaves the EU. It will - not for the first time - have to give some ground on this issue.
One element that sneaked under the radar before Christmas was the proposal by the EU that its existing free trade agreements may not apply to the UK during transition.
Given that the UK will in any case be subject to all EU legislation and to the jurisdiction of the Court of Justice of the EU (CJEU), it seems churlish in the extreme to remove it from the FTAs as of 29 March 2019.
Business should be doing all it can to ensure that a status quo transition really is a status quo transition - no strings attached.
It is tempting to assume that 2018 will be the year Brexit is essentially "solved" - but this time next year the Withdrawal Agreement will still have to navigate ratification - no easy task, particularly if Brexit finally does begin to bite in the UK, with business forced to make important investment decisions from Q2 2017 onwards.
2017 was a momentous year - 2018 will be even more so. We hope you continue to enjoy this year's editions of the Brexit Bulletin, and of course if you have any comments we would be very happy to receive them.
If you have any suggestions about the Brexit Bulletin or want to find out more about a specific aspect of Brexit, please do let us know. Please visit the Grayling Brussels website, follow us on Twitter @TheEULobby, and don't forget to check out our Brexit Papers and Timeline.
This week's contents:
UK Highlights -