EU Signals U.K. Trade Talks Are Still Months Away -- 2nd Update
April 29 2017 - 2:39PM
Dow Jones News
By Laurence Norman and Valentina Pop
BRUSSELS -- The European Union adopted its core positions
Saturday for the coming Brexit negotiations, making it clear to
Britain that talks on a future trade agreement remain months
away.
Some EU leaders expressed frustration with the British
government, saying London didn't understand what it would take to
resolve key divorce issues the bloc wants tackled before talks on
the future relationship can begin.
That suggests there could be hard discussions after Britain's
June 8 election, as the two sides try to bridge major divisions on
issues like the exact rights EU citizens will enjoy in Britain
after Brexit and the EU insistence that the U.K. pledge to stand by
tens of billions of euros of past spending pledges the U.K. has
made to the EU.
U.K. Prime Minister Theresa May has said she wants discussions
on a future trade agreement as soon as possible, though she has
acknowledged a deal cannot be completed until Britain leaves the
bloc, due in March 2019.
For the U.K., securing a future agreement speedily is crucial
for avoiding serious economic challenges once it exits the bloc.
The EU has said any transitional deal, which could smooth Britain's
exit from the bloc, would only last a few years.
Speaking after Saturday's meeting, European Council President
Donald Tusk said EU leaders had backed this phased approach to
negotiations. He said for talks to move onto discussions on a trade
agreement, there would need to be unanimous agreement among EU
leaders.
German Chancellor Angela Merkel said the hope was to complete
the divorce talks in the autumn although some EU officials said
Saturday negotiations on the future relationship were unlikely
before the end of the year. That would leave less than a year to
shape a future agreement since the EU wants negotiations wrapped up
by October 2018 to leave enough time to ratify a divorce deal.
Speaking after the meeting, Ms. Merkel said she had "the
impression" that the EU's phased approach to the negotiations "are
not clearly understood by some in the U.K."
European Commission President Jean-Claude Juncker and the EU's
chief negotiator Michel Barnier met Wednesday with Mrs. May in
London to discuss the negotiations.
EU officials said Saturday the British government still seems to
believe that on the issue of the rights of EU citizens, it would be
enough to secure a broad agreement promising fair treatment when,
in fact, the EU wants a detailed deal in place.
"I have the impression sometimes that our British friends...do
underestimate the technical difficulties we have to face," Mr.
Juncker said. "The single and not simple question of citizens
rights is in fact a cortege of 25 different questions which have to
be solved. So this will take time."
Saturday's meeting was the first formal summit of EU leaders
without Mrs. May, a month after she sent Britain's divorce
letter.
The EU's negotiating guidelines state that the U.K. cannot gain
sector-by-sector access to the single market and that EU courts
must have a role in Britain after Brexit. They divorce talks will
seek to avoid that a hard border is re-established between Northern
Ireland and the Republic of Ireland and raise the future status of
Gibraltar, a small British territory subject to a centuries-old
territorial dispute with Spain.
U.K. Brexit Secretary David Davis said both sides are
approaching the negotiations with good will but acknowledged that
the talks "will be tough and, at times, even confrontational."
The U.K.'s main business lobby group, Confederation of British
Industry said that with EUR600 billion worth of trade every year
between the U.K. and the EU, "the economic case for making rapid
progress on a trade agreement is crystal clear."
EU officials said part of Saturday's discussion was devoted to
the risks of the Brexit talks failing. Mr. Barnier has said that
would have negative effects for both sides but especially for
Britain.
"We have to be clear what happens if things get rough," said one
official describing the discussion.
Meanwhile, there were fresh signs that the coming Brexit talks
were weakening trust between London and Brussels.
Mr. Juncker complained about a last-minute British decision to
block some EUR6 billion in spending on security, aid and other
programs.
The U.K. government told Brussels early this week it couldn't
approve the spending because the government had now gone into the
official pre-election period. EU officials complained that Britain
had not in the past blocked decisions following through on already
agreed programs.
Mr. Juncker raised the issue with Mrs. May on Wednesday but
Britain hasn't changed its position.
"It would be desirable and it would facilitate the beginning of
the negotiations if the U.K. were to be able to withdraw the
reservation that it entered," Mr. Juncker said.
--Jason Douglas in London contributed to this article
Write to Laurence Norman at laurence.norman@wsj.com and
Valentina Pop at valentina.pop@wsj.com
(END) Dow Jones Newswires
April 29, 2017 14:24 ET (18:24 GMT)
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