Anti-Brexit demonstrators hold Union and EU flags outside the Houses of Parliament in London. Image Credit: AFP

MADRID: It has taken six months of talking but the United Kingdom and the European Union have at least agreed that they will talk some more.

As the calendar for 2017 draws ever closer to flipping over into 2018, that is the state of the Brexit negotiations as Britain moves nearer by the day to ending its 43-year marriage with Brussels.

Today, there are 462 days left before Brexit takes effect at 11pm on March 29, 2019.

The EU and the UK also generally agreed that there will be a further transition period of 21 months to allow for a gradual withdrawal of the world’s fifth largest economy out of the bloc of 28 European nations. By January 1, 2021, Germany, the world’s fourth largest economy will dominate an economic bloc that stretches from the Atlantic to the Black Sea, and from the Baltic states to the Balearic Islands and that was worth €14.8 trillion (Dh72.66 trillion) in 2016.

By then, if negotiators from Brussels and London can hammer out a free trade deal over the next nine months, the UK will have a bespoke Brexit deal to allow it to pursue economic ties with the US, India, China and Canada, and will be free of the red tape and immigration issues a majority of Britons believed Europe was responsible for when they narrowly voted to end their 43-year membership of the EU in the June 2016 referendum.

Or, should negotiators fail to reach an agreement, Britain will revert to trading with the EU and the rest of the world on World Trade Organisation rules — a series of measures that would impose customs duties and levies on a whole range of goods imported and exported from the island nation to global markets.

But the clock is ticking — and it was set to the inevitable deadline by UK Prime Minister Theresa May on March 29, 2017 when she triggered Article 50 of the Lisbon Treaty, giving formal notice of Britain’s intent to leave the bloc. Since then, however, May has been critically weakened by a general election last June that saw her Conservative party returned to power but as a minority, dependent on a confidence and supply arrangement with the Democratic Unionist party from Northern Ireland. Her party and government remains deeply divided over whether the UK should have a “hard” or “soft” Brexit.

A “hard” Brexit would see Britain crash out of the EU on March 29, 2019 without any formal divorce agreement on ending four decades of marriage to the EU. That would mean WTO rules would immediately take effect, London would be free to set its own immigration policies, and the role of the European Court of Justice and of the existing body of legislation that applies to Britain, as well as all European nations, would simply not apply to the UK.

The downside of a “hard” Brexit is that the UK economy could likely suffer a sever shock, the pound would likely crash, and it would necessitate the return of passport, security and customs checks on the border between Northern Ireland and the Republic of Ireland to the south, as well as the rest of the EU. One inherent danger is that might reignite political and sectarian divisions on the island, leading to a renewal of conflict — one that claimed 3,600 lives over three decades.

Europe too would be convulsed by a hard Brexit, with Ireland, France, the Netherlands, Denmark and Spain hardest hit by the sudden break.

A “soft” Brexit would allow for an orderly agreement that would gradually take effect, limiting the economic and political consequences of the UK’s departure.

It has taken six months of negotiations thus far to reach a broad agreement that there are reasonable grounds to continue talking. The EU27 quickly agreed initially that there were three main areas that needed to be agreed between the UK and Brussels before any full Brexit talks could take place. These covered the monetary dues owed by Britain for leaving the EU, the fate of the 2.5 million EU citizens who live now in the UK, and the 1.5 million Brits who live in the EU, and maintaining an open border on the island of Ireland.

Last week in Brussels, the UK and the EU agreed to move to Phase Two, where trade would be discussed as well as the role of the ECJ and an transition period.

By agreeing to move forward, both sides have effectively recognised that a “soft” Brexit is the only sensible way forward. Yes, as it stands now, Britain will leave the EU by March 2019 and out of transition by the end of 2020.

But there is a catch.

“Nothing is agreed until everything is agreed” is the phrase used to warn that the agreement reached so far could be ripped up if the next set of talks fail.

And the pressure of that clock is really beginning to count. EU leaders are not prepared to talk trade until the end of March.

Any Brexit deal will have to be approved by all 28 national governments, some of which will require parliamentary votes — and some regional parliaments are also required to vote on the deal. The European Parliament too will have a vote on the deal — one that will be parsed by all 28 leaderships. Any slip up along the way would require even more negotiations.

If all the approvals are to happen, the Brexit deal has to be wrapped up by October. By this time next year, if there’s no broad agreement in place, the spectre of a “hard” Brexit looms large. Then, the December 2020 transition deadline will be dead in the water.