UK wants transitional deal in event that no trade deal with EU is reached
The UK government is said to be negotiating for a Brexit transitional arrangement, even if talks with the European Union (EU) result in no agreement, according to Whitehall insiders. The government reportedly believe that the EU, to mitigate any negative economic impacts of a 'no deal' scenario, would grant a "status quo" transition period, during which the UK would comply with existing trade rules and the jurisdiction of the European Court of Justice. Talks on trade and future relationships begin later this year.
UK government wants the EU to give it a transition period even if talks on the future relationship break down.

This would prevent Britain from crashing out in March 2019 with no arrangements in place.

Talks on trade and transition will get underway this year.

LONDON — The UK government is reportedly seeking to negotiate a Brexit transitional arrangement that will take place even if negotiations fail to produce a deal on a future relationship.

Whitehall sources have told The Times that they believe the European Union will be willing to grant Britain a transition period following Brexit even if talks on future trade and cooperation break down.

This is because the European side is wary of the potential economic impact of a no-deal Brexit without transition, and also does not want a large hole to appear in its budget in 2019 and 2020, the report adds.

In guidelines published last month, the EU said that any transition will last up to 18 months and require Britain to comply with the bloc's trade and customs rules, as well as accept the jurisdiction of the European Court of Justice.

This sort of deal has been described as "status quo" and "standstill" transition.

British negotiators are hopeful that their EU counterparts will allow transition to take place no matter what happens in future relationship negotiations, which will get underway later this year.

This would give the UK government and civil servants nearly two-years to prepare for a hard Brexit, should talks fail to produce an agreement on future trade and cooperation.

Britain and the EU will have to overcome some key sticking points regarding transition before they can move onto the question of the future relationship.

For example, the UK government wants to be able to negotiate new free trade deals with other countries during transition, and is reluctant to accept any new EU laws implemented during this time-limited period.

The EU side wants any final deal to be sent off to the EU Parliament for ratification at around October of this year.

This leaves both sides with 10 months to negotiate both transition and the principles of a future relationship.