EU offers UK free-trade talks - with tough terms

Mr Tusk says there will be no starting parallel talks on all issues.
Mr Tusk says there will be no starting parallel talks on all issues.PHOTO: AGENCE FRANCE-PRESSE

Negotiating guidelines make clear Britain must first agree to demands on Brexit terms

VALLETTA/BRUSSELS • The Euro- pean Union yesterday offered Britain talks this year on a future free trade pact, but made clear in the negotiating guidelines that London must first agree to Brussels' demands on the terms of Brexit.

These include paying tens of billions of euros and giving residence rights to some three million EU citizens in Britain, according to the proposed negotiating objectives distributed by EU summit chair Donald Tusk to Britain's 27 EU partners.

The document also sets tough conditions for any transition period, insisting Britain must accept many EU rules after any such partial withdrawal. It spells out EU resistance to Britain scrapping swathes of tax, environmental and labour laws if it wants to have an eventual free trade pact.

The guidelines, which may be revised before the EU27 leaders endorse them at an April 29 summit, came two days after British Prime Minister Theresa May triggered a two-year countdown to her country's withdrawal in a letter to Mr Tusk that included a request for a rapid start to negotiations on a post-Brexit free trade deal.

"Once, and only once we have achieved sufficient progress on the withdrawal, can we discuss the framework for our future relationship," Mr Tusk told reporters in Malta - a compromise between EU hardliners who want no trade talks until the full Brexit deal is agreed and British calls for an immediate start.

"Starting parallel talks on all issues at the same time, as suggested by some in the UK, will not happen," Mr Tusk said, while adding that the EU could assess as early as this autumn that Britain had made "sufficient progress" on the exit terms in order to open the second phase of negotiations, on future trade.

Brussels has estimated that Britain might owe it something of the order of €60 billion (S$90 billion) on departure, although it says the actual sum cannot be calculated until it actually leaves.

What it does want is to agree the "methodology" of how to work out the "Brexit bill", taking into account Britain's share of EU assets and liabilities. Britain disputes the figure but Mrs May had said on Wednesday that London would meet its "obligations".

The EU's opening gambit in what Mr Tusk said would at times be a "confrontational" negotiation with Mrs May's government also rammed home Brussels' insistence that while it was open to letting Britain retain some rights in the EU during a transition after 2019, it would do so only on its own terms.

Britain will have to go on accepting EU rules like free migration, pay budget contributions and submit to oversight by the European Court of Justice - issues that drove last June's referendum vote to leave and elements Mrs May would like to show she has delivered on before an election in 2020.

"Should a time-limited prolongation of Union acquis be considered, this would require existing Union regulatory, budgetary, supervisory and enforcement instruments and structures to apply," Mr Tusk's draft guidelines state, in reference to a transition period that diplomats expect could last from two to five years to smooth Brexit.

The negotiations will be among the most complex diplomatic talks ever undertaken and the EU guidelines are only an opening bid. EU officials believe they have the upper hand in view of Britain's dependence on exports to the continent, while British diplomats see possibilities to exploit EU states' differences.

REUTERS

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A version of this article appeared in the print edition of The Straits Times on April 01, 2017, with the headline 'EU offers UK free-trade talks - with tough terms'. Print Edition | Subscribe