The UK can agree a trade deal with the EU before it leaves in March 2019 but it will be a “high stress” process, Brexit Secretary David Davis has said.
He told MPs that he “disagreed” with his EU counterpart Michel Barnier’s recent remarks that a comprehensive agreement could take up to three years.
Although “technically” the UK could not actually sign a deal until it leaves, it could happen “a nano second” after.
He also said he wanted an outline deal on a transition period in early 2018.
He said by the first quarter of next year, it “should be pretty plain what we are trying to deliver” in terms of an implementation period – which could last about two years and look “much like” the status quo in terms of trade, migration and other arrangements.
However, he noted the EU had not yet drawn up their final negotiating guidelines on any transition.
An early transition agreement, he told the Commons Brexit select committee, was vital to give businesses certainty and the UK and European governments time to prepare, although he insisted the UK would be ready for all the “critical” changes that would be needed in March 2019.
Talks on a trade deal would take much longer, he conceded, but he insisted there was enough time for them to be concluded before the UK’s exit.
Under the terms of existing EU treaties, the UK would not be able to sign a trade deal with the EU until it becomes a “third party” and has left the EU.
Mr Davis said “technically” this was true, but said that a deal could be signed almost immediately after. “It could be a nano second.”
He said negotiations with the EU would be unlike any other free trade deal with another country, given current levels of two-way trade, regulatory equivalence and the fact that key issues could be dealt with simultaneously.
Many EU states wanted a speedy deal, he said, but he acknowledged that it would be up to EU leaders to decide how quickly they wanted to proceed and it could happen at the “59th minute of the 11th hour”.
“It will be very high stress, very exciting for everyone watching, but that’s what will happen,” he said.
“In technical terms, there is no reason why we can’t do this in the time available. We do have to maintain a degree of determination but I am quite sure in my mind we can do this.”
Britain’s five biggest business lobby groups warned earlier this week that the UK risks losing jobs and investment without an urgent Brexit transition deal.
Mr Davis, who is leading UK negotiations, said he was aiming for minimal disruption during a transition period, with the UK retaining existing arrangements on customs, financial services, aviation and migration from the EU and also having access to EU trade deals with countries like Canada and Japan.
While the European Court of Justice would continue to have jurisdiction in the UK at the start of this period, he said he believed by the end an alternative system of international arbitration would have been set up.
He told MPs that there were different types of “no deal” scenarios, including one where the UK defaulted to World Trade Organisation rules and had “bare bones” agreements on nuclear co-operation and other areas.
He suggested that an outcome where the two sides were unable to agree anything was “off the probability scale” but conceded in such a circumstance, the UK would not have to pay any financial liabilities.