Brexit: UK has until end of 2020 to change its mind on leaving single market and customs union, says EU

'During the transition period, everything is still possible', says chief negotiator Michel Barnier as he promises 'no dogmatism' from Brussels

Benjamin Kentish

Political Correspondent

Thursday 12 April 2018 09:04 BST

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What is still needed to complete a deal with the EU?

The UK will be given until the end of 2020 to change its mind on leaving the single market and customs union, the EU’s chief negotiator has said.

Michel Barnier said the UK government has the full length of the Brexit transition period to reverse its decision to leave the two trading blocs.

The EU would be willing to amend its “red lines” if Britain does the same, he said, adding that there would be “no dogmatism” from Brussels.

The confirmation leaves open the option of the UK remaining part of EU institutions if striking new trade deals with other countries proves more difficult than predicted.

It will come as a boost to pro-EU campaigners who are urging the government to soften its Brexit stance.

The Brexit transition period is due to end on 31 December 2020 – 21 months after Britain formally leaves the EU on 29 March 2019.

What is the Brexit 'transition'?

The UK will remain part of the single market and customs union until then, but Theresa May has insisted it will leave both, as well as the jurisdiction of the European Court of Justice, when the transition period ends.

Mr Barnier told reporters: "So long as they have not left, during the transition period, everything is still possible.

"If the British wish to modify their red lines, we will modify ours in consequence.

"I am not hearing that today but everything is possible. There is no dogmatism."

The biggest issues facing UK on leaving EU

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1/8The biggest issues facing UK on leaving EU

The biggest issues facing UK on leaving EU

Post-Brexit immigration

workers sorting radishes on a production line at a farm in Norfolk. One possible post-Brexit immigration scheme could struggle to channel workers towards less attractive roles - while another may heighten the risk of labour exploitation, a new report warns.

PA

The biggest issues facing UK on leaving EU

Customs union

A key point in the negotiations remains Britain's access to, or withdrawal from, the EU customs union. Since the referendum there has been hot debate over the meaning of Brexit: would it entail a full withdrawal from the existing agreement, known as hard Brexit, or the soft version in which we would remain part of a common customs area for most goods, as Turkey does? No 10 has so far insisted that “Brexit means Brexit” and that Britain will be leaving the customs union, but may be inclined to change its position once the potential risks to the UK’s economic outlook become clearer.

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The biggest issues facing UK on leaving EU

Northern Ireland-Irish border

Though progress was made last year, there has still been no solid agreement on whether there should be a hard border between Northern Ireland and the Republic of Ireland. To ensure borderless travel on the island, the countries must be in regulatory alignment and therefore adhere to the same rules as the customs union. In December, the Conservative Party’s coalition partners, the DUP, refused a draft agreement that would place the UK/EU border in the Irish Sea due to its potential to undermine the union. May has promised that would not be the case and has suggested that a “specific solution” would need to be found.

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The biggest issues facing UK on leaving EU

Transition period

Despite protests from a small number of Conservative MPs, the Government and the EU are largely in agreement that a transitional period is needed after Brexit. The talks, however, have reached an impasse. Though May has agreed that the UK will continue to contribute to the EU budget until 2021, the PM wants to be able to select which laws made during this time the UK will have to adhere to. Chief negotiator Michel Barnier has said the UK must adopt all of the laws passed during the transition, without any input from British ministers or MEPs.

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The biggest issues facing UK on leaving EU

Rights of EU citizens living the UK

The Prime Minister has promised EU citizens already living in the UK the right to live and work here after Brexit, but the rights of those who arrive after Brexit day remains unclear. May insists that those who arrive during the transition period should not be allowed to stay, whereas the EU believe the cut-off point should be later.

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The biggest issues facing UK on leaving EU

Future trade agreement (with the EU)

Despite this being a key issue in negotiations, the Government has yet to lay out exactly what it wants from a trade deal with the EU. Infighting within the Cabinet has prevented a solid position from being reached, with some MPs content that "no deal is better than a bad deal" while others rally behind single market access. The EU has already confirmed that access to the single market would be impossible without the UK remaining in the customs union.

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The biggest issues facing UK on leaving EU

Future trade agreements (internationally)

The Government has already begun trying to woo foreign leaders into prospective trade agreements, with various high profile state visits to China, India and Canada for May, and the now infamous invitation to US President Donald Trump to visit London. However the UK cannot make trade agreements with another country while it is still a member of the EU, and the potential loss of trade with the world's major powers is a source of anxiety for the PM. The EU has said the UK cannot secure trade deals during the transition period.

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The biggest issues facing UK on leaving EU

Financial services

Banks in the UK will be hit hard regardless of the Brexit outcome. The EU has refused to give British banks passporting rights to trade within the EU, dashing hopes of a special City deal. However according to new reports Germany has suggested allowing trade on the condition that the UK continues paying into the EU budget even after the transition period.

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He added: "What creates the problem in Ireland, is the decision of the United Kingdom to leave the EU but also to leave what it is not obligatory to leave, that's to say the single market and the customs union."

The EU said last month that it is prepared to shift its position if the UK backs down over its plans for a hard Brexit.

Guidelines published by the European Council ahead of the second round of Brexit talks said their position was “compatible with the positions stated by the UK” but added: "If these positions were to evolve, the Union will be prepared to reconsider its offer."

Mr Barnier’s confirmation was welcomed by anti-Brexit campaigners.

Labour MP Chris Leslie, a supporter of the Open Britain group, said: "These comments by Michel Barnier demonstrate yet again how ludicrous it was for the Government to take single market membership off the table in the Brexit negotiations.

"Leaving the single market will lead to huge economic damage, years of austerity and will starve our public services such as the NHS of vital resources.

"If the cost of leaving the single market and of Brexit is too high, people are entitled to keep an open mind about whether it's the right path for the country."

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