The EU has told Theresa May that it will not start discussing the terms of a trade relationship with the UK until February at the earliest and only then if the British prime minister has taken a grip of her divided cabinet and come forward with an agreed vision of the future.
While May was being lauded by her ministers in London on Friday, EU officials in Brussels said that when leaders do move the Brexit talks on, the first negotiations will have to be limited to the terms of a time-limited transition period.
The EU is unable to talk about a future trade deal without “more clarity” from May on her cabinet’s vision of a free trade agreement with the EU, a senior EU official said.
Michel Barnier made it clear that Britain could only expect a post-Brexit trade deal along the lines of that recently agreed with Canada.
Suggestions put forward from London so far were dismissed as “cherry-picking” and “having your cake and eat it”. “The UK has not been particularly specific, the official added. It has been setting out a number of red lines, but what the UK has been saying so far still entails a number of internal contradictions and does not seem entirely realistic to us.
In recent weeks, Boris Johnson and Michael Gove have suggested the British could deregulate to gain a competitive advantage in certain sectors while enjoying frictionless trade with the European continent and Ireland.
British Prime Minister Theresa May (L) and European Commission President Jean-Claude Juncker address a press conference at the European Commission in Brussels on December 8, 2017. The EU official added of trade talks:
The ambition is to do it quickly. But that has to involve, I think, more clarity from the UK side. I read in the press that the cabinet has not yet discussed this matter. And in light of that maybe more work is needed on the UK side before we can really engage on this.
An additional complication is that the delay in finding agreement between the commission and the UK government on the opening issues has left the member states without a settled position among themselves on the principles that will instruct trade talks.
A slim leaked draft of the EU’s guidelines on the future framework says that they will put forward their outline for the future at the next meeting of leaders, which is likely to be in February or March, officials said.
Such is the uncertainty in Brussels about the British government’s vision for a future trading relationship, however, that talks could easily be delayed further if the cabinet did not present its plan or if there was dispute during talks about the transition period.
The official said: Before any real substantive negotiations we would need to have additional guidelines and in order to do that we need more clarity.
The first set of guidelines to be agreed at a summit next week details the EU’s terms for a transition period and insist that the UK will have to accept current and new EU laws, as well as the jurisdiction of the European court of Justice, without having any seats in decision-making institutions.
British Prime Minister Theresa May (L) is welcomed by European Council President Donald Tusk at the European Council in Brussels on December 8, 2017. It says: The European council notes the proposal put forward by the United Kingdom for a transition period of around two years, and agrees to negotiate a transition period covering the whole of the EU acquis [EU law], while the United Kingdom, as a third country, will no longer participate in or nominate or elect members of the EU institutions.
As it will no longer be an EU member, the UK will also fall out of the current free trade agreements the bloc has with countries around the world, and will need to come to an arrangement to avoid sudden obstacles to global British trade from 29 March 2019.
However, Brussels is confident that the prime minister has accepted the limitations that will be applied to the UK during the transition period. The EU is also open to Britain starting negotiations with countries around the world on future trade deals during the transition period.
Earlier on Friday, the president of the European council, Donald Tusk, expressed his concerns that Downing Street was not, however, aware of how difficult the coming months would be in the negotiating rooms.
While being satisfied with today’s agreement, which is obviously the personal success of Prime Minister Theresa May, let us remember that the most difficult challenge is still ahead, Tusk said. We all know that breaking up is hard. But breaking up and building a new relation is much harder.
Since the Brexit referendum, a year-and-a-half has passed. So much time has been devoted to the easier part of the task. And now, to negotiate a transition arrangement and the framework for our future relationship, we have de facto less than a year.
The EU’s chief negotiator, Michel Barnier, also made it clear on Friday that such are the UK’s red lines about leaving the single market, the customs union and the jurisdiction of a the European court of justice that Britain could only expect a trade deal along the lines of that recently agreed with Canada, which does not cover financial services.
The suggestion from some in the UK that the terms of a trade deal could be largely settled by the time Britain leaves the bloc was also dismissed by officials.
One senior official said: Now you have got 15 pages [in the agreement between the UK and the EU]. That took nine months. The [Canada free trade deal] is 1,598 pages. You can draw your own conclusions.
European governments and business leaders further warned that the most difficult negotiations were still to come.
A spokesman for the German government, Steffen Seibert, said: “I think everyone understands that there is still much work for negotiators to do even if the European council decides to move into phase two of Brexit negotiations.
Britain’s Secretary of State for Exiting the European Union David Davis (L), Britain’s Prime Minister Theresa May (2-L), European Commission President Jean-Claude Juncker (2-R) and European Union’s chief Brexit negotiator Michel Barnier (R)… France’s foreign minister, Jean-Yves Le Drian, told France-Inter radio that work on Brexit negotiations was “progressively reaching a positive outcome” but the conditions of Britain’s departure still needed to be “clearly defined.”
Negotiators have until October 2018 to strike a broad agreement on trade and transition, which will pave the way for a fully-fledged trade deal and other treaties to be negotiated after the UK leaves the EU in March 2019.
One leading MEP warned the European parliament could refuse a Brexit transition deal if it was not happy with the outcome of the next phase of negotiations. We will only accept a transitional period after Brexit if we are satisfied with the outcome of the second-phase of negotiations, said Manfred Weber, the head of the centre-right European People’s party bloc in the European parliament.