Time spent negotiating a Brexit deal is time needed to ratify and prepare

The future relationship negotiations are coming down to the wire. On 31 December, the UK will leave the transition period whether or not a deal has been agreed with the EU.

Boris Johnson and Ursula von der Leyen have agreed to “go the extra mile” in search of an agreement. But each day of negotiations is one less day for scrutiny of any deal – or preparing for what a deal would mean from 1 January 2021.

Legislation to implement a deal could be rushed through parliament – but could store up problems

The UK government is planning to fast-track a new bill through parliament to ratify the deal.^[1] If the alternative was no deal on 1 January, it is unlikely either the Commons or the Lords would stand in the government’s way.

But this is likely to mean MPs and peers approving a deal which they have hardly had a chance to look at, and in doing so would risk storing up problem. When the government introduced the controversial clauses relating to implementation of the Northern Ireland protocol in the UK Internal Market Bill, it claimed these were necessary to address new concerns about what it had signed up to in the Withdrawal Agreement last year. Although this may have been disingenuous, the debate in the Commons suggested many MPs really didn’t know what they had agreed to in January when they rushed through the Withdrawal Agreement Bill.

More fundamentally, rushed legislation risks ‘bad law’ ending up on the statute book. Scrutiny of legislation in parliament helps to ensure proper consideration has been given to any unanticipated consequences of a particular approach. Fast-tracking a bill may be unavoidable, but it will carry risks.

Ratification is more complex for the EU – and rushing this could have political consequences

The process is more complicated on the EU side. First there would need to be a decision about who actually needs to be involved in ratification. Will the deal be a “mixed” agreement on which national parliaments have a vote, or can the process be limited to the Council and the European Parliament? And even if only the Council and European Parliament need to vote, there will be little time for the usual processes of consultations by member state governments with their own national parliaments and debates in the European Parliament.

Whether or not the deal is a mixed agreement, the Council does have the power to provisionally apply many aspects of it, including those dealing with tariffs. Legally speaking, it could even do so without the European Parliament voting on the deal until a later date. But this by-passing of MEPs could worsen tensions between the Council and the European Parliament at a time when member states need MEPs’ votes on a number of key issues. Michel Barnier has suggested that there may be a period of ‘no deal’ in January while the European Parliament considers a deal ^[2], but this would be deeply damaging for traders. However, it would be a mistake to assume MEPs will definitely acquiesce.

Time has already run out for businesses to prepare to make immediate use of a deal

Beyond the technical discussions around ratification processes, the timeframe for business to prepare for any deal shortens each day. While the difference between no deal and a deal will matter – especially for those who trade in goods – the uncertainty over the outcome of the negotiations, as discussed at our recent event, has hampered preparations.

For example, firms will need to comply with complex rules of origin requirements to benefit from the preferential access of a free trade agreement – but the details of these requirements are still unknown. In practice, this means some businesses – particularly those with complex supply chains – will be unable to benefit from tariff free access on 1 January unless the UK and EU agree to a grace period to allow them to adjust.

Similarly, many businesses will need to adjust their logistics, accounting and sales software to respond to any deal reached with the EU. The Institute of Directors and BASDA have expressed concern that these business systems will not be fully ready for 1 January. ^[3] This could lead to both increased disruption to business operations as well as broader non-compliance with the new rules entering into force in January.

As the clock ticks down, 31 December may be the only deadline that matters for the negotiators. But there is still much do even if an agreement can be reached – and time is rapidly disappearing.

EU ratification: what is the process