Brussels – The European Union and Britain have agreed on "a large part" of Britain's withdrawal deal, including the terms of a post-Brexit transitional period lasting until the end of 2020, EU chief Brexit negotiator Michel Barnier said Monday.

The EU wants to finalize a withdrawal treaty with Britain by October as the country is set to exit the EU in March 2019.

Transition period "very useful"

The treaty will include the terms of Britain's divorce from the bloc and the details of a transition period, which is meant to provide companies and citizens with certainty right after Brexit and allow enough time for Britain to put post-Brexit systems in place.

In a "decisive step," Barnier said, the two sides had been able to agree on "a large part" of the withdrawal agreement, most notably the terms of a transition period that foresee keeping all EU rules in place in Britain until the end of 2020.

"The period of transition requested by the United Kingdom will be a time which is useful, very useful, for the United Kingdom administration and businesses in order to prepare themselves for the future," Barnier said.

Guarantees for EU citizens

He noted that Britain had agreed to guaranteeing the same rights for EU citizens arriving during the transition period as for those who arrive before Brexit. The same will be true for British citizens moving to the EU during the transition.

Britain will also abide by all EU laws, even though it will not have a say in the decision-making processes.

"We've committed to working during that period in good faith and to continuing to respect the principle of sincere and loyal cooperation," Barnier said.

The transitional time will also allow the EU and Britain to agree on a future trade relationship, Barnier said, noting that the negotiations will be "intense and demanding" due to the limited timeframe.

Britain's chief negotiator David Davis hailed the agreement on the transition period, saying that "a good deal" on Britain's withdrawal was "closer than ever before."

He noted that Britain had agreed to the transition deal lasting until December 31, 2020, despite an earlier push by Britain to keep the end of the period flexible. "It's near enough to the two years that we asked for," Davis said.

Commitment to resolving outstanding issues

Barnier warned, however, that certain key issues were still outstanding in the withdrawal agreement, including how to avoid border controls between Northern Ireland and the Republic of Ireland.

Barnier stressed yet again that the issue would need to be sorted out "within the framework of the withdrawal," after Britain had said that the question could be dealt with in the context of a future trade deal.

"Nothing is agreed before everything is agreed – and that applies to everything in the text," Barnier said.

Davis acknowledged that the issue of Ireland was still outstanding, adding that both the EU and Britain were committed to resolving the issues.

"While there is as yet no agreement on the right operational approach, we know what we need to do — and we're going to get on with it," Davis said.