Brexit transition could take up to five years, says Enda Kenny

The Brexit transition period is likely to last much longer than anyone expects, the former taoiseach Enda Kenny has said.

The British prime minister Theresa May has suggested a two-year transition period beginning when the UK formally leaves the European Union in March 2019.

"This transition period will last much longer than people imagine," Mr Kenny said, speaking at an event in New York organised by Matheson solicitors.

The transition period, he said, “has to be as long as is necessary”.

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The managing partner of Matheson, Michael Jackson, said the two-year period "is the average transition time for a single EU directive that has to be implemented by companies .

“We’re talking about something that’s much bigger and much more unprecedented here. I personally believe it’s going to take anything up to five years to properly transition,” he said.

Asked how he would describe the consequences of a hard Brexit, Mr Kenny replied “potentially catastrophic”.

The UK will “probably not” be able to conclude enough trade agreements with third countries to compensate for the loss of access to the single market, he said.

"The United Kingdom has not drafted any trade agreement with any country in the last 40 years," the former taoiseach said.

"It took seven years to put the Ceta agreement in place with Canada. And Canada is a country that's very easy to deal with."

Years to negotiate

The UK’s trade agreements, he said, “will take years to negotiate in detail”.

Mr Kenny emphasised that the Irish corporation tax rate was “non-negotiatable”, and could not be interfered with as a matter of EU law.

“Nobody can tell us or order us to change the rate of corporation tax,” he said.

Mr Kenny said it was important that the Brexit talks achieved some progress as companies needed to have certainty and clarity about the exit and the transition by early next year.

“Companies will make decisions about where they’re going to be in the spring for the next three to five years,” he said.

Both British and EU officials say they must make progress in the negotiations in the coming weeks if they are to meet the deadline of the EU’s December summit.

Unless EU leaders agree by then that “sufficient progress” has taken place in the first phase of the talks – covering Irish issues, the UK’s Brexit bill and arrangements for citizens rights in the future – the negotiations will not move on the “future relationship” phase which includes a possible trade agreement between the EU and the UK.

Failure to reach this phase by December would risk a breakdown of the talks, threatening a hard Brexit and the imposition of customs duties on the Irish border.