The food industry has welcomed news that a ‘transition period’ will be implemented if the UK leaves the EU on New Year’s Eve 2020.

The ‘ordered withdrawal’, announced yesterday by chief Brexit negotiator Michel Barnier and David Davis, secretary of state for exiting the European Union, is expected to be ratified by leaders of the other 27 countries at a European Council meeting on Friday.

Draft legal text published by the UK Government confirmed Britain would no longer be members of the bloc at the end of March 2019 – signalling the end of the Article 50, which was triggered last March and gave Britain two years to leave the EU. The text also confirmed there would be a 21-month implementation period.

“We welcome agreement between the UK and EU on a transition period that will allow continued free movement of people until at least 2020,” said Jim Winship, director of the British Sandwich Association.

“This will provide some reassurance to the many food businesses that rely heavily on EU workers to maintain the food chain and the service levels we have come to expect. Businesses will also be assured by the signs that both parties are moving towards a longer-term agreement.

“We hope the final agreement will be similarly flexible in terms of worker mobility, as our industry is very dependent on the availability of employees from the EU.”

Alex Waugh, director general of The National Association of British & Irish Millers (Nabim), told British Baker he hoped the agreement would be signed off on Friday.

“Nabim understands that the agreement means existing arrangements for business will remain in place until the end of 2020, meaning that there will be more time to plan for changes that will come thereafter,” he said.

“The next stage will involve a huge amount of detailed work on the shape of the future relationship between the UK and the EU from 2021 onwards.

“We hope this will result in an accord that avoids the introduction of tariffs and minimises regulatory issues around trade in grain, flour and bakery products, as both sides say they want.”

Nabim and the Food & Drink Federation (FDF) last week flagged up concerns over tariffs on goods exported from the UK.

Commenting on news of the transition period, Tate & Lyle Sugars senior vice-president Gerald Mason said: “It’s a significant achievement that the UK will be able to agree new trade agreements with other countries during the implementing period, as well as applying existing ones. For businesses like ours, which do the majority of our trade with the rest of the world, this is great news.”

Ian Wright, FDF director general, described the progress as ‘positive’, particularly in relation to “citizens’ rights, and a time-limited transition period”.

“The FDF has long supported a transition period of at least two years,” he said. “Transition must not be open-ended, but its end point will depend on how quickly the nature of our future trading relationship with the EU is confirmed.

“Some food and drink businesses will be ready earlier than two years, but transition must not end until the bulk of the industry is ready and we have confidence in the systems on both sides of the Channel. Food and drink manufacturers are now looking for serious reassurance from Government that it will not press ahead at any economic cost and that it will be flexible if systems – particularly customs – are not ready in 21 months’ time.”

However, chief Brexit negotiator Barnier yesterday confirmed there was a “lot of work still to be done” on subjects including the Ireland and Northern Ireland border.

Wright insisted that negotiations must avoid a hard border on the island of Ireland, where ingredients, finished products and workers cross the border many times a day.

“Until the appropriate technological solutions can be found, then the option of a regulatory backstop must be left on the table,” he said. “We hope that European leaders will give the green light on Friday for talks to formally move onto our future relationship with the EU – food and drink’s most important trading partner.”