The EU’s Donald Tusk said on Wednesday he had recommended a draft legal text on transition, citizens’ rights and other withdrawal issues to its members.
It followed Spanish concerns over how the accord would affect its demands for a say on how Brexit affects Gibraltar.
The transition is set to start on exit day, on 29 March 2019. It is due to continue until the end of 2020.
Prime Minister Theresa May has said what she calls the “implementation period”, in which the UK will have to adhere to EU rules, will be a bridge to a new economic and political partnership with the EU.
Under the terms of the agreement, the UK will be able to negotiate, sign and ratify its own trade deals while EU citizens arriving in the UK will enjoy the same rights and guarantees as those who arrive before Brexit.
To the dismay of many Tory MPs, the UK will effectively remain in the Common Fisheries Policy until the end of 2020.
And a solution to avoiding a hard border on the island of Ireland has yet to be agreed, with the EU insisting on a “backstop” option of Northern Ireland remaining in the customs union and single market.
In a message on Twitter, Mr Tusk said he had urged the other 27 EU leaders to welcome, in principle, the agreement on transition and other matters at a session expected to take place on Friday.
“In practice, the transition phase will allow to delay [sic] all the negative consequences of Brexit by another 21 months,” he wrote.
He told reporters he was “absolutely sure” the two sides would find a lasting solution to prevent the return of physical checks on the border between Northern Ireland and the Republic of Ireland.
Gibraltar among issues still to be resolved
However, a written declaration issued by the European Council on the eve of the summit noted that agreement had not been reached in some areas, including both Northern Ireland and Gibraltar.
“Negotiations can only progress as long as all commitments undertaken so far are respected in full,” it said.
The document also called for “intensified efforts on the remaining withdrawal issues, as well as issues related to the territorial application of the Withdrawal Agreement, notably as regards Gibraltar, and reiterates that nothing is agreed until everything is agreed”.
There have been complications over the British overseas territory, which will leave the EU on the same day as the UK, in the run-up to Thursday’s meeting.
At the UK’s request, Gibraltar was specifically mentioned in the transition text but Spain, which maintains a long-standing sovereignty claim, subsequently sought reassurances that its interests would be protected.
Also on Friday, the EU is set to adopt guidelines for its negotiations over its future relationship with the UK.
Other issues on the EU’s agenda include the implications of US tariffs on steel and aluminium imports and the future enlargement of the EU into the Western Balkans.