EU says Brexit transition to end in December 2020

During the transition period, the UK would have to comply with all EU rules and policies, including the four freedoms of the single market such as free movement, but would not participate in any decision-making as it is no longer a member.

"This cannot be an 'a la carte' transition period, all EU policies would apply," chief EU negotiator Michel Barnier said setting out the proposal of the commission for negotiating the transition period.

"The UK would become a third country, and would no longer be part of the institutions of the EU," he added.

The UK would also have to continue to comply with European Court of Justice rulings.

The commission's document said the transition "requires existing Union regulatory, budgetary, supervisory, judiciary and enforcement instruments and structures to apply".

Barnier said while the UK will not participate in the EU institutions, there will be political dialogue on the areas of cooperation, such as on foreign affairs, defence, which would continue after the transition period.

The commission's proposal said the UK could be invited to attend meetings, without voting rights, where the UK is needed for EU implementation or when the UK is specifically concerned.

No withdrawal without transition

The chief negotiator said that finalising the withdrawal agreement – based on an agreement signed off by EU leaders last week – needs to go "hand-in-hand" with the transition.

He warned that a transition period is "part of an orderly withdrawal", and added that the withdrawal agreement needs to be finalised by October 2018. But without an orderly withdrawal there would be no transition.

Barnier also warned that agreement reached by the EU and the UK on the terms of divorce, and which need to be transposed into a legal text, are not open for discussion.

"We will not be moving backwards, not going back on any of the points that were subject of the stipulation of sufficient progress," he told reporters in Brussels after the commission adopted its proposals on the transition negotiations.

No speculation on no deal

He did not want to speculate what would happen if the UK parliament voted down the withdrawal agreement, but said that preparing the ground for the vote should not be left to the last minute.

"We have to build trust for the right conditions to be in place for ratification," Barnier said.

The withdrawal agreement would also be accompanied by a political declaration that should "clearly online the shape" of the EU-UK relationship after Brexit.

Barnier said this text – still to be negotiated by the UK and the EU – should be "fairly precise".

It should include an economic chapter focusing on a free trade agreement along the lines of what the EU has with Canada, specific arrangements on areas such as aviation, a chapter on legal cooperation and on bilateral cooperation on issues such as defence, security and foreign policy.

The UK would be able to start exploratory talks with partners that have an agreement with the EU, but the EU and the UK needs to work out how the EU's international deals could "maintain the effects" on the UK during transition.

London will also need to prepare to replace the more than 750 international agreements the EU has, Barnier warned.

Barnier reiterated that it is the UK's red lines – leaving the customs union and the single market – that leads "logically" to base the future relationship on a free trade deal along the lines with what the EU has with Canada, Japan, or South Korea.

He added that each deal is "tailor-made to the country we are signing this with".

EU member states' ministers will discuss the commission's negotiations proposal at the end of January, and negotiations could kick off in February.

EU leaders are expected to adopt negotiating guidelines on the future relationship talks.