The UK has in principle agreed to a Norway type transitional deal, The Independent reported on Tuesday.

The UK becomes a rule taker

In Brussels, it is clear that a transitional period means retaining the status quo for an additional two-year period, with London becoming a “rule taker” rather than engaging in decision-making processes. That means retaining freedom of movement, the jurisdiction of the European Court of Justice, and current level contributions to the EU budget until December 2020.

MEP Elmar Brock described the transition deal under negotiation as a Norwegian agreement for a limited time.

According to the Belgian MEP Philippe Lamberts, during the transitional period, the UK remains a member in “all but name” until December 2020. Lamberts is a member of the six-members parliamentary Brexit steering group, which periodically consults with UK and European Commission officials to be briefed on the progress of the negotiations. The policy framework discussed thus far, according to Lamberts, adheres to the Norwegian model of relations to the Single Market.

Hard to pass a transitional deal in the UK

However, sealing a transitional deal with Norwegian features will be a politically tumultuous process in London. An Ipsos Mori report published on Monday – based on interviews with 105 MPs – suggests that three-quarters of the Conservative parliamentary group in the British House of Commons opposes the notion of freedom of movement for the next two-years. Moreover, hardline frontbenchers disagree with the notion of the UK becoming a rule-taker or an EU “vassal state.”

This battle must be over in London as well as Brussels by March 2018. It is then that the UK government hopes to conclude a transitional deal, so as to ensure that businesses will need to adjust to a single regime-change in their operating environment.

For his part, Chancellor Philip Hammond has made clear the UK intends to “replicate” the EU normative status quo. However, David Davies is of the view the UK should only opt for a transitional deal if there is a significant chance of securing a Canada “plus-plus” agreement, which would include services. As long as Brussels is only willing to offer a “Canada dry” agreement – access to the Single Market for goods only – Davis in effect if not in principle against a transitional agreement in Norwegian terms.

No deal base scenario

For this reason, Brussels is also preparing for a “no-deal” scenario, which means there will be no transitional period, according to MEP Gabriele Zimmer.

While in London the main issue at hand is to secure the support of the Conservative parliamentary group for retaining the status, in Brussels the key for a transitional deal is the envisioned future relationship.