The announcement came from European Commission president, Ursula Von der Leyen, during a news conference at Government Buildings in Dublin on Wednesday. It will ultimately give the UK autonomy as to whether it seeks more time to negotiate a trade agreement with the European Union after it leaves the bloc.
Britain is set to leave the EU on January 31, after a divorce deal late last year.
It will, however, remain bound by the bloc’s rule until the end of 2020 under an agreed transition period aimed at smoothing the process.
Boris Johnson insists he will not ask for more time, though many have scoffed at this admission, citing his previous dogma on the departure date being October 31.
And, EU leaders, including Ms Von der Leyen, cast doubt on the feasibility of agreeing a trade deal over the next 11 months.
Ms Von der Leyen told a news conference: “There is only one of the two who can ask for an extension and that is the United Kingdom. We will see mid-year where we are at.”
She said Brussels was well-placed to move as fast as possible following her meeting with Mr Johnson last week.
Should the transition period fail to extend beyond 2020, trade relations between the EU and Britain from the start of 2021 will either be governed by whatever agreement can be made by the end of the year, or by World Trade Organisation(WTO) rules.
The Prime Minster has also insisted there will be no customs checks between Northern Ireland and the rest of the UK after Brexit.
“The result is that goods will have to undergo customs checks when they are moved from Great Britain to Northern Ireland, creating a border in our single market.”
He told the commons it would be bad for the union and bad for the economy.
He did, however, concede that the consent mechanism for Stormont is an improvement on the deal Mrs May initially negotiated.
Under Mr Johnson’s deal, Northern Ireland will effectively remain in the EU’s single market for goods.
But, Stormont can vote to end that arrangement in the future.
Mrs May’s deal had angered many Leave politicians as it allowed the EU to enter the UK through a “backstop” in Northern Ireland.
This could only have ended with the EU’s approval.
The Prime Minister hopes to negotiate a full trade deal with the EU by the end of the year.
Lord Barwell said that even if the UK wanted to stay align with the EU’s rules, the negations would not be easy.
He said: “We are about to negotiate something completely unprecedented.
“A free trade agreement which is not about removing barriers to trade but agreeing when and to what extent they will have to be put up.”