So, let’s start with transition. The details have now been agreed between the UK and the EU, which provide a clear plan up to the end of December 2020. (You can hear our analysis of the agreement in our most recent Beyond Brexit podcast). But, here are three important things to bear in mind:
First - to use a trite phrase, nothing is agreed until everything is agreed. So, while there was good progress at the most recent EU summit, and we perceive a deal being reached as the more likely of the potential outcomes to the Article 50 negotiations, there are still some complex areas in the negotiations to be resolved, such as the future of the Irish border.
Second - even if the agreement holds, what’s agreed isn’t legally enforceable yet. It still needs to be ratified - or approved - along with the other elements of the withdrawal agreement, by the EU Parliament, the EU27, and our own parliament. Only once that process is complete will we have complete certainty on transition, expected early in 2019.
Finally - there is still the possibility that the transition period will be extended. Whilse there's no ‘extension clause’ in the draft text, it’s been acknowledged by the Prime Minister and others that it may take longer to negotiate the full free trade agreement (FTA).
Moving on to the scope of a future trade deal. Whilst at the moment this element of the Article 50 negotiations contains the most ‘unknowns’, with many only to be resolved during the transition period, there is much that we do know about the potential ‘landing zone’ for a deal.