Donald Tusk, the president of the European Council, has announced his creation of draft negotiating guidelines in preparation for Brexit discussions.
British Prime Minister Theresa May triggered Article 50 this week and the guidelines set out the terms in which Tusk wants to conduct negotiations leading to the UK’s departure from the EU – the issues to be settled, how the talks should be sequenced and the outcome to be sought.
So, what exactly is he proposing and what effect will it have? Here, we answer some of the key questions.
What is he proposing?
Essentially, two phases of talks.
The first will disentangle the UK’s ties with the EU, settle any debts and share out assets, resolve the status of EU citizens in the UK and Britons living on the continent and determine the future of the land border between Britain and the EU in Ireland.
The second will look at future relations between the UK and the remaining EU – and crucially the establishment of a post-Brexit free trade agreement (FTA).
Will this be welcomed in Downing Street?
A UK government spokesman said it’s clear both sides want to approach the talks “constructively”, but there is no doubt May has not got everything she wants.
Although Tusk has not insisted trade talks must wait until after the UK has officially left the EU, as some feared, he has said there must be “significant progress” on the process before trade discussions begin.
He also ruled out sector-by-sector deals on access to the single market for industries like automotive and financial services. And he vetoed separate talks with individual member states, making it difficult for May to cut special deals with key partners such as Germany.
What does “significant progress” mean?
Tusk did not explain, but it’s likely the EU will at least want agreement on the size of the “divorce bill” to be paid by the UK to settle its outstanding financial commitments at this point.
European Commission president Jean-Claude Juncker has said this cost will come to around £50 billion.
Does Tusk have the final say?
No. His guidelines go to a special Brussels summit on April 29, when leaders of the remaining 27 EU states will agree a mandate for chief negotiator Michel Barnier.
They could amend Tusk’s proposals at that stage. It is then expected the UK and EU will meet for “talks about talks” in June, when Britain is likely to renew its demand for divorce and trade negotiations to be held at the same time.
Why is Britain so bothered by the sequencing of talks?
May wants a trade deal in place by the time Britain leaves the EU on March 29 2019 – or perhaps earlier to allow changes to be introduced gradually.
This is regarded as a vital part of providing certainty to business, which is concerned about the danger of a “cliff edge” move towards costly export tariffs and regulatory barriers with the EU if no FTA is agreed.
The closer Britain gets to the 2019 deadline without an FTA, the more likely it is multinational companies will start shifting operations and staff abroad, making an early start very desirable.
Delaying trade talks until after the “divorce bill” is settled also robs the Prime Minister of a potential negotiating weapon, as she will not be able to link the size of the payment to generous trading arrangements.
So does this mean real negotiations will finally get going now?
Not necessarily. The “talks about talks” could drag on for some time. Both sides recognise getting the right format for negotiations is an essential part of ensuring they maximise their influence.
The election of a French president in May and a German government in September may also delay progress. Observers thus suspect divorce talks won’t begin before the autumn.
What are the first things to be decided?
Both sides want early agreement on citizens’ rights. And Brussels wants Britain to agree the amounts it will pay to settle its commitments. But it is unclear whether these issues can be finalised until other aspects of the deal are agreed.
The guidelines state that “in accordance with the principle that nothing is agreed until everything is agreed, individual items cannot be settled separately”.
So can the talks be completed in time for Brexit Day?
That remains to be seen. May insists it is possible, but there are vast and complex issues to discuss, with little more than a year to complete them in.
The need for ratification of an Article 50 exit deal by the European Council and European Parliament, as well as a vote in the UK’s own Parliament, means talks will probably have to conclude by October 2018 to meet the deadline of March 29 2019.
And trade talks under Article 218 of the EU treaties are likely to require approval not only in Brussels but also by as many as 38 national and regional assemblies across the EU, delaying the process even further.