politics

U.K. Won't Pay Brexit Bill Until Trade Deal Is Clear, Davis Says

  • Parliament wants detail before agreeing divorce terms: Davis
  • Says future trade framework won’t be legal text by October
Jo Swinson Says Whatever the Brexit Deal Is, the Public Deserve to Have a Vote

The British Parliament could block the Brexit deal if the European Union fails to offer a detailed blueprint for the future terms of trade with the U.K., Brexit Secretary David Davis said.

The EU and the U.K. are aiming to agree the Brexit treaty by October and to publish a framework for the future trade relationship between the two sides at the same time. But Davis said British legislators will be unlikely to sign up to the exit terms -- which include payments of as much as 39 billion pounds ($55 billion) to the EU -- without a clear trade plan.

David Davis

Photographer: Dario Pignatelli/Bloomberg

“We have got to have the substance of the future relationship nailed down as well,” Davis told the Wall Street Journal CEO Council event in London on Thursday. “The withdrawal agreement involves payments of up to 39 billion pounds -- that’s a lot of money -- and parliament is unlikely to sign off such a thing unless we know pretty substantively” what the trade offer will be.

His comments raise the stakes in the negotiations with just six months left to complete the legal text on the divorce terms. EU officials say the detailed talks on the terms of the future trade relationship will have to take place after Brexit, during the 21-month transition period, because there isn’t enough time before Britain leaves the EU in March 2019.

Read more: Why the Details of the Post-Brexit Future Will Remain Foggy

Davis is resisting this, though his warning of a parliamentary veto could come back to haunt him when legislators get to vote on the draft deal. Opponents of the U.K.’s withdrawal from the EU are already targeting the vote in Parliament as the key moment when they can try to reverse Brexit.

While he accepted that the future trade framework will not be in the form of a “legal text” by October, Davis said it must provide “quite a lot of detail.”

British and EU negotiators agreed the terms of the transitional period that businesses want to help smooth the path at a meeting last month, although it won’t be legally guaranteed until the final divorce deal is struck.

During the question and answer session, Davis said he believed British and EU regulators can now treat the agreement on transition as if it is legally binding, which would be particularly important for banks. “We think we have got it to the point where the regulators say, this is going to happen,” he said.

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