What is the anticipated timetable?
Almost a year after British voters asked to leave the European Union, the official exit talks started on Monday 19 June. David Davis, the Brexit secretary, sat opposite Michel Barnier, the EU’s chief negotiator, at the European commission headquarters in Brussels. With a handshake for the cameras, the two men began a technically arduous journey that will seal Britain’s fate for decades to come.
The purpose of these talks is to unwind Britain’s 44-year-old relationship with the EU and map out future ties. Negotiators will be working against the clock. Deal or no deal, the UK will leave the EU on 29 March 2019. But the time for serious negotiations is actually shorter: Barnier hopes to conclude talks in October 2018, to allow time for the European parliament to ratify the deal.
What happens first?
For Brussels, Brexit is like a marital breakdown: first comes the divorce, then the new relationship. The EU has long said that the UK will not be allowed to start trade talks until it agrees an outline deal on citizens’ rights, money and the Irish border.
Davis had threatened “the row of the summer” over this timetable, but on Monday it became clear that he had conceded the point: “It is not when it starts, it is how it finishes,” he said. “Nothing is agreed until everything is agreed.” The British quickly discovered they had no leverage against an EU that had united on this point.
The EU’s two-step sequence crystallised when Barnier visited the capitals of all the other 27 EU member states in winter 2016. On this Brexit grand tour, the Irish pressed the case for prioritising the border; Spain put Gibraltar on the table; and everyone wanted citizens’ rights and money sorted out quickly.
Now Barnier has his orders, agreed unanimously, after eight months of work. He cannot start trade talks without a fresh mandate from EU leaders. EU27 diplomats have never discussed a new mandate and had no intention of doing so.
Despite the loss of face, the UK may find that the EU sequence turns out to be convenient. Theresa May did not win a mandate for her hard Brexit. The political fight for a softer exit is expected to intensify. With so many unanswered questions about what Brexit means, getting started on formal negotiations and talking about citizens’ rights now suits the UK well.
When can Britain talk about trade?
Some Brussels observers think the EU is being too rigid and making unreasonable demands that trade is off the table. But there is some flexibility: trade talks can begin after “sufficient progress” on the divorce, a judgment EU leaders will make, in October or December, depending on how things are going. If the UK passes the – deliberately ambiguous – “sufficient progress” test, talks can move on to trade and other areas, such as foreign policy, financial services, police and judicial cooperation.
What are the sticking points?
Both sides repeated on Monday that they were prioritising a rapid agreement on citizens’ rights to bring certainty for 3.5 million EU nationals in the UK and 1.2 million Britons on the continent. But the apparent consensus is deceptive: the EU is insisting that the European court of justice be the ultimate arbiter in resolving disputes on citizens’ rights, in theory extending the writ of the European court over the UK for a century. This role for the ECJ would prove toxic for hardline Brexiters and is even controversial for some European jurists. Failure to resolve this point will be a bad sign.
The EU also wants detailed guarantees on citizens’ rights, allowing people to live their lives as if Brexit never happened. But that could mean in a few areas EU nationals have more rights than British people, such as the right to bring a non-EU spouse into Britain regardless of income.
Davis has promised to set out the UK’s detailed position next Monday, while Theresa May will explain her thinking to fellow EU leaders at a summit on Thursday.
Inevitably, there will be sound and fury over the Brexit bill. Various numbers have been mooted: €40bn (£35bn), €60bn net total, with a €100bn gross total grabbing the most headlines. For now, the EU does not have a final number, but rather a range of scenarios, depending on the smoothness of Britain’s transition away from the EU. While the EU is looking for detailed guarantees on citizens’ rights, the Brexit bill could be fudged until 2018.
The UK could even keep EU payments, such as farm subsidies, for two years, if it agreed to pay into the budget during that time. Negotiators hope that by concentrating on the technicalities first and naming a number later, the final bill will be an easier sell for the British prime minister, because it can be presented as the price of a new deal. But the clearer the methodology, the easier it will be to do the maths and the bigger the potential political storm. Diplomats worry that May has made no attempt to prepare public opinion for the Brexit bill or other inevitable compromises.
The fraught issue of the Irish border received the most attention on the the first day of Brexit talks and will be managed by leading officials on both sides. Oliver Robbins, the permanent secretary at the department for exiting the EU, will work with Sabine Weyand, Barnier’s deputy, on avoiding a hard border within Ireland. But the question will be difficult to resolve without knowing the UK’s intentions on remaining in the EU customs union, or what can be agreed with Brussels on tariffs.
What about a transition deal?
The EU expects to discuss a transition deal at a late stage in Brexit talks, possibly August 2018. Barnier has said a transitional agreement makes sense only when the UK knows where it is going.
Could anything interrupt or delay the talks?
Over the next 21 months there will be elections, political accidents and a relentless swirl of events. When May still commanded a majority in the House of Commons, it was assumed that the talks would get serious after the German elections in autumn 2017. Now the biggest uncertainty is an unstable British government led by a weak prime minister without a mandate for Brexit. Since the Tories’ election debacle, EU diplomats do not know what kind of Brexit the British want. Nor are they certain about May’s political future and what her early departure could mean.
The Brexit clock will not stop for another snap election, even if formal talks are suspended. The best British negotiators could hope for would be a few weeks’ extension in March 2019. But the EU will insist that the UK is gone ahead of European elections in May-June 2019.
Throughout the Brexit talks, the door remains open for the UK to change its mind and revoke its divorce letter. But once Britain walks out, the door slams shut. The only way back in after summer 2019 would be for the UK to apply for EU membership. A British minister would be back in Brussels to start talks all over again.