My analysis of the draft transition and withdrawal agreement

The big news from the publication of the UK-EU Draft Withdrawal Agreement was that a transition deal for the period after the UK leaves the EU on the 29th March had been agreed between the two sides. Big outstanding points remain however, not least Ireland and the future relationship, but despite that this agreement is significant. The financial settlement (the so-called Divorce Bill) that many analysts felt could sink the talks last year has been pretty much signed and sealed, with money in the end proving the least fractious element of the Brexit talks.

Citizens’ Rights were another area almost entirely coloured green (for agreed) in the draft text yesterday. Under the proposals a simple process of applying for residency will be sufficient six months after the end of the transition period for EU citizens in the UK and vice versa, with all EU citizens arriving up until the end of transition having the right to stay permanently provided they apply for residency.

Ireland remains the biggest potential stumbling block, the UK agreed to the inclusion in the draft withdrawal agreement of the fallback option proposed by the EU several weeks ago, that Northern Ireland remain aligned with single market and customs union rules. It remains difficult, if not impossible, to see any British government signing up to that text in the final agreement, so much work remains to be done on the Irish border question in the coming months.

As expected from the outset, the draft agreement does allow the UK to conclude and ratify free trade agreements with third countries during transition, as long as they only enter into force at the end of that period. How many agreements will be possible to achieve in that relatively short period is unclear, but this was an important point of principle for the UK.

The duration of transition remains unchanged from earlier drafts at 21 months, until the end of 2020, there is still time for an extension before the Withdrawal Agreement enters into force, and many expect that may be necessary due to the complexity of agreeing the future relationship. The most important point about yesterday's agreement, was both sides certainty that there will be a transition period, which allows businesses already making contingency plans for all scenarios in a year's time more confidence about the business environment for 2019 and 2020. The transition period will also be overseen by a joint committee on implementation, to allay concerns about the UK being simply a rule taker in that period. This has come at a cost of concessions in other areas, including on EU citizens right to remain during the transition period.

Fish was another area of the transition agreement that attracted some headlines on concessions, particularly in Scotland. Fish quotas are decided 12 months in advance, so the 2019 quota will be decided by the UK as a full member in 2018. The 2020 quotas will be agreed with input from the UK and cannot be set to reduce the UK share, but this will lead to a 12 month longer wait for the UK to have full control over its fishing quotas.

Nothing is agreed until everything remains an important principle to remember, and there is a possibility that everything in this agreement could fall down before ratification in the autumn. Today's agreement did show though that both sides are moving inexorably towards a deal.