U.K. to Hold EU to Pledge on Early Trade Scoping: Brexit Update

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EU Leaders Agree to Move to Second Phase of Brexit

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European Union leaders formally agreed that the U.K. has offered enough on the divorce settlement for talks to move on to the future relationship. Leaders are in Brussels on Friday for the second day of a two-day summit.

Here are the latest developments, updated throughout the day. Time-stamps are London time.

May Says Trade Talks Will Begin Straight Away (2:29 p.m.)

Prime Minister Theresa May told Sky News that trade talks will start immediately and repeated her line that Britain will leave on March 29, 2019. May came back from Brussels last night and she addressed the television cameras in a short interview from her constituency in Maidenhead.

The EU said the real discussion on commerce will begin in March but has left the door open to preliminary discussions before then.

U.K. to Hold EU to Pledge on Early Trade Scoping (2:05 p.m.)

The U.K. will hold the EU to its pledge to start initial discussions about the future relationship before March, according to a U.K. government official.

The EU says talks will start in March but initial discussions can start before then.

“The real negotiations on the second phase will start in March next year. I cannot say when these negotiations will be concluded,” European Commission President Jean-Claude Juncker says.

EU Leaders Warn the Hard Part is Yet to Come (1:03 p.m.)

German Chancellor Angela Merkel said the next phase in Brexit talks, when transition and the future trade relationship will be discussed, will be tougher than what’s gone before.

The first phase, during which the key divorce issues were settled, took about six months. Trade talks will start in March and an outline deal needs to wrapped up by October so that it can be ratified by the European Parliament.

Spanish Prime Minister Mariano Rajoy and Italian Prime Minister Paolo Gentiloni agreed with Merkel that the next step will be tougher, while French President Emmanuel Macron vowed the EU would do “what it takes” to maintain the unity of the 27 as talks move on.

The next thing to be discussed is the transition, the two-year grace period for after Brexit.

EU Sets Out Vision for Transition (12:05 p.m.)

EU leaders set out what they want to happen during the transition phase: the U.K. will keep all rules in place, will maintain the four freedoms, and the European Court of Justice will have jurisdiction. It’s not yet clear if the U.K. will accept all of this as the government has said it’s up for negotiation.

The EU also made clear there can be no backsliding on promises made in the first round of talks. Those pledges need to be put into writing as soon as possible, as the drafting of the withdrawal agreement will start soon.

Trade talks will start in March, once both sides have figured out their position on the future relationship. Still, there could be exploratory talks between the two sides before that, a French official said.

EU’s Tusk Congratulates May (11:34 a.m.)

EU President Donald Tusk, who chairs leaders’ summits, tweets the outcome of today’s meeting in Brussels: “EU leaders agree to move on to the second phase of #Brexit talks. Congratulations PM @theresa_may”

EU Leaders Approve Start of Second Stage of Talks (11:28 a.m.)

The European Union’s 27 remaining leaders have just voted unanimously to start the second phase of the Brexit negotiations with the U.K., meaning that discussions on a transition period are likely to start in the coming weeks. The two sides will begin work on the outlines of a trade deal after a summit in March.

After endorsing the European Commission’s assessment from a week ago that U.K. and EU negotiators had made “sufficient progress” on priority separation issues, the leaders will publish a set of guidelines to direct negotiators over the coming months.

The commission is planning to unveil a more detailed position on the transition period on Wednesday, with the 27 governments scheduled to formally approve it at a meeting on Jan. 29. It will then be up to the U.K. to decide whether to accept the proposal wholesale or try to negotiate.

Officials say it will resemble EU membership but without the U.K. having a voice in the bloc’s decision-making. It’s likely to be limited to two years.

Italy’s European affairs minister, Sandro Gozi, said on Sky Television that he wanted the future relationship to be built on trade but also on a partnership of “security, defense and justice.”

Coming Up:

  • Next week: May will hold a Cabinet meeting to discuss what kind of trade deal the U.K. will seek from the EU for after Brexit. She will also face another knife-edge vote in Parliament on the government’s amendment that aims to set the date of Brexit into law.

What Happened on Thursday:

  • EU leaders voiced support for May, with Dutch Prime Minister Mark Rutte going so far as to call her a “formidable” leader. At dinner, May asked them to be creative and move speedily on to a transition deal. Her comments were met with a round of applause.
  • Brexit Talks Set to Get Messy as EU Unity Passes High-Water Mark
  • U.K. lawmakers have called on Twitter Inc. to provide more information on accounts that may have influenced the referendum. Twitter did reveal that RT, an account run by the state-funded broadcaster formerly known as Russia Today, spent $1,031.99 on six advertisements related to the campaign. 
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