PM says period of ‘vassalage’ should not extend beyond end of 2020 - but what does this mean?

Boris Johnson has said he will legislate to legally prohibit the government from agreeing to an extension of the 11-month transition period due to come into force after the UK formally leaves the EU on 31 January.

What is the point?

During the transition period the UK will remain in the EU’s single market and customs union but it will not have a seat in any of the bloc’s decision-making institutions. The arrangement has been described by the prime minister as a state of “vassalage” but it provides time for negotiations over the future relationship to take place.

The withdrawal agreement makes provision for officials on the EU-UK joint committee to agree to extend those arrangements by “one or two years”, if necessary.

Johnson has insisted this stand-still period will not persist beyond 31 December 2020. He has said 11 months is “ample” time to do a “fantastic” trade deal. Government sources have suggested the deadline will focus minds on both sides of the negotiating table.

Is 31 December 2020 a real deadline?

No. The government can always legislate later to free its hands. It is a symbolic move. But that is not to say the initiative lacks meaning. Speaking at a European Policy Centre event in Brussels on Tuesday, the European commission’s director general for trade, Sabine Weyand, said the message was understood, adding: “I think, given all the signals we are getting, and now these signals are translated into law, that we are well advised to take seriously that the UK doesn’t intend to go for an extension of the transition, and we need to be prepared for that.”

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What does that mean for the negotiations?

Ursula von der Leyen has already said that an 11-month transition period is insufficient to negotiate a comprehensive deal. She has suggested “sequencing” the talks, prioritising issues where there is no international fallback or unilateral measures at hand to avoid a cliff-edge. For example, the future trade in goods and the issue of access to British waters for European fishing fleets will be first up. Other vital areas, such as road haulage, aviation rights for British carriers, data-sharing, and any special arrangements for services, including the financial sector, will have to wait.

Does this raise the risk of a no-deal exit on 31 December 2020?

Probably. Johnson could perform a U-turn at any point up to 1 July, when an extension needs to be agreed, but he is not expected to do so. If, in the coming negotiation, the British government refuses to sign up to the EU’s full level playing field demands on issues such as state aid and environmental standards, there will be a protracted negotiation over the level of tariffs on UK goods. If the tariffs are deemed to be overly punitive, the UK side might judge there to be little to gain in continuing to talk at all given the EU is offering nothing for the City of London. But some sort of deal, albeit bare bones, remains the most likely outcome.