The European Union’s remaining 27 member states have made clear that trade talks with the UK can only begin once there is clarity on the terms of an orderly withdrawal, according to draft negotiating guidelines circulated among Europe’s capitals.
In her letter to the EU triggering Article 50 letter on Wednesday, Theresa May called for the exit and trade negotiations to happen simultaneously. But the guidelines, seen by BuzzFeed News, will demand for negotiations to be phased, with the first phase addressing the disentanglement of the UK from the union.
This includes dealing with Britain's existing commitments to the EU; providing clarity and legal certainty to EU citizens, businesses, and other stakeholders; and coming up with "creative and flexible" solutions to avoiding a hard border between Northern Ireland and Ireland. The EU guidelines make clear there can be no talks on the shape of any future relationship at this stage.
“Once and only once we have achieved sufficient progress on the withdrawal can we discuss the framework for our future relationship," European Council president Donald Tusk said at a press conference in Malta on Friday morning.
The guidelines state that negotiations will only be able to move to the next phase once member states agree that sufficient progress has been made on the arrangements for an orderly withdrawal. Crucially, they must also be satisfied that the terms and principles agreed are legally robust.
"Starting parallel talks on all issues, at the same time as suggested by some in the UK, will not happen,” Tusk continued. “And when talking about our future relationship we obviously share the UK’s desire to establish a close partnership between us, strong ties, reaching beyond the economy and including security cooperation, remain in our common interest.”
He added: “The talks which are about to start will be difficult, complex and even confrontational. There is no way around it. The EU27 does not and will not pursue a punitive approach. Brexit in itself is already punitive enough. After more than 40 years of being united, we owe it to each other to do everything we can to make this divorce as smooth as possible."
Once the first phase is cleared, the next phase of negotiations is set to scope out an understanding of a framework for the future UK–EU relationship. However, an agreement on the future relationship can only be concluded once the UK has formally exited the EU.
In response, a spokesperson for the UK government said: “These are draft guidelines and we look forward to beginning negotiations once they have been formally agreed by the 27 member states.
"It is clear both sides wish to approach these talks constructively, and as the prime minister said this week, wish to ensure a deep and special partnership between the UK and the European Union.”
Pro-Brexit Conservative backbenchers were reluctant to criticise the EU’s demand for a substantial agreement on exit terms before beginning trade talks, with some suggesting it represented a partial climbdown by the EU from its previously tougher position.
Dominic Raab MP told BuzzFeed News: “The EU line is in reality quite subtle and nuanced. There is is scope to define the parameters of both the exit deal and future relationship, then move swiftly to the dual track negotiations to settle the technical detail within two years. That would provide the basis for the win-win deal both sides want."
On Thursday, Lord Kerr, former British ambassador to the EU and the original author of Article 50, said negotiations over the divorce settlement between the UK and the remaining EU members must take place simultaneously with talks over their future relationship.
The draft guidelines also make reference to a potential transitional arrangement to bridge between withdrawal and the new relationship. But any such deal will need to be clearly defined, limited in time, and subject to effective enforcement mechanisms - and “would require existing Union regulatory, budgetary, supervisory and enforcement instruments and structures to apply,” the guidelines read.
The EU will commit to strong and constructive ties that are not limited to just trade. But the guidelines reiterate that the relationship cannot have the same benefits as membership, as well as stating that the future trade deal will not amount to participation of the single market or to parts of the single market.
One particularly tricky aspect for May will be the demand to spell out the UK’s relationship with the European Court of Justice early in the talks, and how EU law applies to the exit deal, during any interim arrangement, and in the longer term.
The 27 member states will demand that the withdrawal agreement include appropriate dispute settlement mechanisms, as well as mechanisms to deal with situations that may arise in future, and are not covered by the exit deal. This, the document says, should be done bearing in mind the union’s interest to protect its autonomy and its legal order, including the role of the ECJ.
May has pledged to end the jurisdiction of the ECJ in the UK.
In her letter to Tusk, May had appeared to warn that ongoing security cooperation between Britain and the EU relied on the successful conclusion of a trade deal within two years – something Downing Street has denied.
Tusk said that while this had been interpreted as a clear warning by many, it "must be a misunderstanding".
"Our partners are wise and decent partners, and this is why I'm absolutely sure no one is interested in using security cooperation as a bargaining chip," he said.