Brexit Secretary David Davis and European Union (EU) chief negotiator Michel Barnier announced during a press conference in Brussels that both the United Kingdom and the EU have come to terms on the transition agreement once the U.K’s exit from the EU takes effect.
Both Davis and Barnier are expected to sign the transition agreement during a scheduled summit on March 22 and 23.
Businesses in the U.K. have been keenly awaiting the results of negotiations with the E.U. on the transition agreement. Any agreement reached at the summit will only represent a political commitment which means it is not legally binding until the official agreement covering the U.K’s pull out from the E.U. is finally signed in early 2019.
However Allie Renison, head of Europe and trade policy at the Institute of Directors believe businesses will favour and be satisfied with the transition agreement between the U.K. and the E.U. But her statement concluded with some caution:
“Business leaders will welcome the announcement of a provisional agreement on an implementation period and congratulate the U.K. government for heeding the call of business and making it a priority early on. We are, however, concerned that not enough attention is being given now to the finer details and practical implications of the transition.”
The statement from Adam Marshall, Director General of the British Chamber of Commerce (BCC) read more optimistic in tone and content:
“While some companies would have liked to see copper- bottomed legal guarantees around the transition, the political agreement reached in Brussels is sufficient for most businesses to plan ahead with a greater degree of confidence.”
News of the provisional agreement on the transition period for Brexit helped the British Pound gain versus the United States Dollar.
The transition period is estimated to take 21 months which is close enough to the 2 years which the United Kingdom asked for. Davis echoed the sentiment of Marshall regarding business development planning for companies in the U.K. He believes businesses can proceed and confidently plan their courses of action once Brexit has taken effect.