The long list of orders – which took ministers just two minutes to approve – includes the requirement Britain must continue to allow the free movement of people within the bloc during the transition, accept the authority of the European Court of Justice (ECJ) and take on new rules passed by the bloc.
And although UK representatives may be invited to sit in on and observe some EU meetings, they will not be able to vote.
Negotiating terms will also not allow the UK a say on annual fishing quotas.
The EU has described the arrangement as a “status quo transition without institutional representation”.
With regards to sealing new trade deals during the transition, the negotiating terms demand that Britain must receive the consent of Brussels before it can sign any new agreements.
But Brexit Secretary David Davis has previously acknowledged this would be the case, and the EU’s demands do not prevent the UK from beginning trade talks with other countries.
The bloc’s list of demands also includes several requirements which are at odds with the Government’s stated aims, including having to guarantee the rights of EU citizens who arrive during the transition.
And the final draft of the document, seen by Reuters, could potentially scupper hopes of securing a special deal for Britain’s financial services sector, with the list stating the UK cannot be allowed to negotiate a “sector-by-sector approach” to a future trade deal.
Ministers reportedly took “two minutes” to adopt the instructions this afternoon, which will now be passed on to the EU’s chief Brexit negotiator Michel Barnier.
The proposed transition – or implementation – period is due to kick in after Britain formally leaves the bloc on March 29, 2019.
Brexit news: The EU has agreed its demands for a Brexit transition deal
It is designed to provide time for businesses and government agencies in both the UK and on the continent to get used to new rules and regulations without affecting trade.
Without a transition deal in place, the UK would crash out of the EU in March 2019 and would fall back on to World Trade Organisation rules.
However, this is an outcome favoured by some Brexiteers who are worried the implementation will simply mean Britain is shackled to Brussels for another two years.
Leading Brexiteer, Tory MP Jacob Rees-Mogg has said this, coupled with a lack of voting rights would leave the UK as a “vassal state”.
Exactly how long the transition will last is still to be decided, but EU officials have insisted it cannot run past December 31, 2020.
Michel Barnier will have to stick to the EU’s transition demands during Brexit negotiations
This gives a total potential implementation period of 21 months, which is close to Theresa May’s original hope of one which would last “around two years”.
Included in the EU’s list of transitional demands is that “any agreement will have to be based on a balance of rights and obligations, and ensure a level playing field”.
This means the UK cannot undercut the bloc on tax, labour or other standards which could give Britain a trade advantage.
The document also insists the “four freedoms of the Single Market are indivisible” during the implementation and there can be no “cherry picking”.
One of the four freedoms is the freedom of movement, meaning EU citizens will be free to come and go to the UK as usual, and vice versa.
Key points from the EU’s list of transition demands:
– The transition period may run up until December 31, 2020.
– Britain may sit in on some EU meetings, but the UK will have no involvement in the decision making of new laws or regulations.
– All EU laws, including those passed after Brexit, will apply to Britain. However, the UK is allowed to continue to opt out of some changes to justice and security laws.
– The European Court of Justice will continue to have authority over the enforcement of EU rules.
– The UK must agree to protect the rights of any EU citizen who arrive between when it formally splits from the bloc in March 2019 and the end of the transition.