Trade talks to start as Brexit hits phase two
EU leaders say a quick yes to negotiations with Britain, but Spain threatens to throw a spanner in the works.
Britain and the European Union will begin exploratory talks on a trade pact within weeks after the two sides formalised their breakthrough agreement in Brexit negotiations.
After just a few minutes of talks, leaders of the 27 member states signed off on a three-page statement authorising the start of transition negotiations. They also agreed to begin informal discussions about Britain’s long-term relationship with the bloc ahead of formal talks in late March.
However, as the EU summit broke up yesterday, a new barrier emerged to a transition agreement. Spain insisted that it had a veto and that Britain would have to obtain Madrid’s consent for Gibraltar to be covered.
‘‘Whatever agreement between the EU and the UK, there has to be an agreement between Spain and the UK for that to apply to Gibraltar,’’ Spanish Prime Minister Mariano Rajoy said. ‘‘This applies to the transition.’’
The agreement struck by British Prime Minister Theresa May commits the United Kingdom to abiding by all EU laws and regulations during the transition, including the jurisdiction of the European Court. This has irritated Eurosceptics in her Conservative Party.
EU leaders were at pains to praise May’s role in unblocking the negotiations, after she told them privately on Friday how much ‘‘political capital’’ she had spent on the compromises made so far.
In a clear concession, Donald Tusk, the European Council president, suggested it may still be possible to conclude a comprehensive agreement on trade and future co-operation ready to be signed immediately after Brexit, which is a key demand of the British.
He described the target as realistic but ‘‘dramatically difficult’’ to achieve.
May did not stay in Brussels to hear the outcome of the discussions but afterwards issued a statement declaring that her government was ‘‘well on the road’’ to delivering her goal of a ‘‘smooth and orderly’’ Brexit.
In a joint press conference alongside President Emmanuel Macron of France, Angela Merkel, the German chancellor, said the decision to move on to phase two represented ‘‘quite significant progress’’. Macron said he ‘‘fully agreed’’, adding that any deal would have to maintain the ‘‘integrity of the single market, compliant with our rules’’.
Afterwards, EU officials said trade discussions could now begin ‘‘straight away’’ although they are unlikely to commence until the new year.
May is due to have the first cabinet discussions on the future relationship at the start of next week. These are not expected to result in any concrete proposals but will allow ministers to outline their contrasting visions of Britain’s future relationship with the bloc, in an attempt to forge a consensus early next year.
Alongside informal trade discussions in Brussels, more formal talks on transition arrangements will begin in January. A legally binding withdrawal agreement will also be drafted to be presented to the UK and European parliaments.
Senior EU diplomats have warned that Britain will not leave the EU with a trade treaty but a ‘‘political declaration’’.
‘‘It will not be a legal agreement,’’ a senior EU official said.
The European Commission intends to hold a series of ‘‘seminars’’ of senior member state officials over the next two months in an attempt to thrash out a common position on the trade talks.
While the EU 27 managed to retain a united front during the withdrawal negotiations, many in Brussels fear that unanimity will be much harder to achieve in phase two, given the differing economic relationships that member states have with the UK.