Brexit transition deal may avert UK economic ‘catastrophe’

Financial Times Financial Times

Top EU lawyer says trade pact within 2 years is ‘totally impossible’

It will be “totally impossible” for Britain to wrap up a trade pact with the EU within two years and a transition deal will be needed to avert “a catastrophe” for the British economy, according to one of the EU’s most eminent lawyers.

Jean-Claude Piris, the head of the EU Council’s legal service from 1988-2010, said a trade deal would comprise “thousands of pages and hundreds of articles” and there was no chance of it being completed before a scheduled Brexit in 2019.

The comments by Mr Piris, the legal architect of a succession of EU treaties from Maastricht to Lisbon, directly contradict claims by Theresa May, Britain’s prime minister, that both a divorce deal and a trade accord can be signed within two years of Article 50 being triggered.

“I would expect us to be able to negotiate a deal in the two-year period that has been set out,” Mrs May told MPs on December 20. David Davis, Brexit minister, has made the same claim.

Mr Piris said in an interview that putting in place a UK-EU trade deal “could take up to 10 years” because of the complexity of the task, but added that he hoped it could be concluded more quickly. “We could do it in maybe five years, I don’t know.”

In any event, he said, there would be an inevitable gap between the scheduled date of

It’s not the most pessimistic view because the most pessimistic view is that there will be no agreement at all. Some people say [a trade deal will take] between four and eight years but that is if people have goodwill on both sides

Jean-Claude Piris, EU Council

Brexit in spring 2019 and the entry into force of a trade deal. He said that could cause serious economic damage unless a stopgap arrangement was put in place.

“You vitally need a transition period,” he said. Mr Piris said the interim arrangement was needed to stop the UK falling into the “WTO gap” — where it applied the rules of the World Trade Organisation until the free-trade agreement came into force.

Asked whether a trade deal could take a decade to complete and ratify, Mr Piris said: “It’s not the most pessimistic view because the most pessimistic view is that there will be no agreement at all.

“It will take years, that’s for sure. I don’t know how many years . . . some people say between four and eight years but that is if people have goodwill on both sides.

“The important thing is that clearly there is a gap of a few years between the date where the UK is withdrawing from the EU and the date where this agreement comes into effect, perhaps five or six years.”

Mr Piris said the “WTO gap” would be “a catastrophe for the EU” but mainly for Britain because it did nearly half of its trade with Europe.

“There will be the customs tariffs, there will be controls at the borders and so forth,” he said. “The UK will also lose the benefits of trade agreements made by the EU with 60 countries in the world. You’ll lose also the financial passport.”

Mr Piris said there were two kinds of transitional deal to bridge the gap, the first of which would see Britain staying in the single market for a few years.

But he said that would require Mrs May to sign up for a limited period to existing obligations including the jurisdiction of the European Court of Justice and free movement of people — both of which she has said are red lines in her negotiation.

Mr Piris said the second option was “much more modest” where Britain negotiated to stay in the customs union, similar to the deal enjoyed by Turkey, a non-EU member which has a customs agreement with the EU.

“That would mean the territory of the UK would be in the customs union and you benefit from the whole of the EU’s trade policy including all the agreements we have done in the past and the ones we are going to conclude soon with Japan and so on.”

That would also mean that Britain’s ability to strike trade deals on its own terms would be severely limited during the transition as it would have to apply the trade deals and external tariffs set by Brussels.