The Coronavirus / COVID19 outbreak has presented the world with an unprecedented medical emergency. It has far reaching political and economic implications. The work of governments, regulators, central banks and private industry is likely to be dominated for months dealing with the outbreak and the aftermath.
The UK Government, European Commission and EU27 member states are all dealing with the fallout from the outbreak. This calls into question the chances of completing the negotiations on a future relationship between the UK and the EU, this year. The timeline was already very tight and that was before there were any significant macro events for either side (or all) to deal with.
The UK Government remains resolute that it will not ask for an extension to the transition period. In its most recent statement, it said: “Both sides remain fully committed to the negotiations and we remain in regular contact with the European Commission to consider alternative ways to continue discussions, including looking at the possibility of video conferencing or conference calls, and exploring flexibility in the structure for the coming weeks. The transition period ends on 31 December 2020. This is enshrined in UK law.”
The UK Government and the European Commission also exchanged drafts of their proposed legal texts with each other, despite the planned negotiating round not taking place. The EU text has been made available publicly with the UK reserving the right to publish its own draft at some further point (although it could be leaked). We have also seen in the news that the EU’s Chief Negotiator, Michel Barnier, has tested positive for Coronavirus/COVID 19 and UK Chief Negotiator, David Frost, is in isolation after showing symptoms of the virus.
The Withdrawal Agreement permits an extension to the transition period. Article 132 says “the Joint Committee may, before 1 July 2020, adopt a single decision extending the transition period for up to 1 or 2 years”. As this is a decision by the Joint Committee made up of representatives from both the UK and the EU, the decision would need to be taken by mutual consent. Whilst the UK has enacted in law a prohibition on a Minister of the Crown agreeing in the Joint Committee to an extension of the implementation period (the newly inserted section 15A European Union (Withdrawal) Act 2018) there is theoretically nothing to stop a further piece of primary legislation removing this restriction, if there was political will to do so.
Even if the negotiations were completed, many months of planning and implementation would be needed to get government and business ready for those new arrangements (with even more work to be done in case of a no-deal outcome). With government and businesses dealing with COVID-19, it raises the question of whether there would be enough capacity or bandwidth to prepare for the new arrangements by 1 January 2021.
Given the unprecedented times we are now operating in, it’s hard to imagine how the planned timeframe for the transition period can stay on track. The timeframe was ambitious beforehand; it’s now beginning to look impossible.