The EU and UK are on track to agree on a post-Brexit transition period and pave the way for talks on the future relationship. But major gaps remain on other issues, particularly the Irish border.
At a summit next week, they will sidestep those differences and bank the progress made on transition, citizens’ rights and the financial settlement, set out in agonising detail in a 120-page draft withdrawal treaty that was officially handed over the to the UK on Thursday (see EUROPE 11971).
Getting a deal on the transition text, which takes up only five articles out of 168 in the draft treaty, will be a breakthrough for the UK government, even if they will struggle to sell it at home.
UK Brexit secretary David Davis told BBC Newsnight this week that he was ready to accept 21-month transition period, which is less than the two years the government had requested.
The trick will be to agree language acceptable to hard Brexiteers, who fear the UK will become an EU “vassal state” during that time.
The deal currently on the table hinges on assurances that the UK will be able to comment on new EU laws during the transition (particularly on fisheries) and negotiate trade deals with non-EU countries.
But Britain will not have a veto on new EU laws nor the ability to implement new trade deals without EU authorisation, with one EU official saying that they were “tinkering with words to hide the hard fact that the UK has to be a rule taker” until December 2020.
“Decision-making autonomy is the mantra for us”, said another EU official. “We will never allow any one a say in our procedures”.
Moreover, any deal on transition next week will be “provisional” only, and “not valid” until the full withdrawal treaty is approved by the European and UK parliaments.
“If there is no withdrawal agreement there will be no transition agreement”, a senior EU official warned.
This gives the EU – and Ireland – more leverage to close any open first-phase issues, including the Irish border, citizens’ rights and other separation issues such as nuclear energy, data transfers, intellectual property rights, judicial and administrative cooperation and customs.
Ireland
Like in December, Ireland is the issue that has the biggest potential to derail talks.
The EU strategy seems to be to effectively park the issue until the next summit in June, and, in the meantime, begin a series of intensive three-way talks among Commission, Irish and British negotiators. The first meeting is scheduled for 26 March.
“There will not be a breakthrough now on Ireland”, said one EU official close to the talks.
However, the EU says its backstop option – which would keep Northern Ireland aligned with EU customs and some single market rules if all else fails – is an essential part of any solution.
This heaps pressure on the UK to come up with workable solutions, either via a new trade deal, or a “unique” solution that would preserve an open border.
But the UK Parliament’s Northern Ireland Affairs Committee said in a new report Friday that no “technical solutions, anywhere in the world, beyond the aspirational” would avoid the need for infrastructure at the border post-Brexit.
Irish officials insist that the issue has not been sidelined, pointing to European Council president Donald Tusk’s “Ireland first” comments in Dublin last week (see EUROPE 11977). EU lead negotiator Michel Barnier told ambassadors this week that there was continuing “solidarity” with Ireland.
And Parliament’s Brexit coordinator, Guy Verhofstadt, has linked the border and further UK concessions on citizens’ rights to progress on a future trade deal.
In a letter to EU negotiator Michel Barnier, he said a “satisfactory and comprehensive” deal on citizens and Ireland is an “essential and preliminary basis for the proper definition of the future relationship”.
Talks on the withdrawal treaty will continue over the weekend, with David Davis due to return to Brussels on Monday for the first time this year to seal a provisional deal.
Future relations
If it seems as if not much has changed since December, it’s because not much has – except for an astronomical increase in the amount of paper in circulation.
Another of those papers is the European Council’s draft guidelines for the future relationship (see EUROPE 11976), a short, sharp document that has been discussed by EU ambassadors twice and is now on its way to prime ministers’ advisors, or sherpas, in advance of the summit.
There is speculation that sherpas, meeting on Monday in Brussels, could add a reference to financial services to the draft guidelines, on the request of several member states.
European Council president Donald Tusk deliberately left out any mention of the financial sector when he first tabled the guidelines last week, with a senior EU official saying on Friday that the current draft “is not a substantial departure” from the first.
EU diplomats have also played down a European Parliament bid to offer the UK a four-pillar association agreement, a format usually reserved for neighbouring countries (like Ukraine or the Western Balkans) that are on the road EU membership (see EUROPE 11981).
In a vote this week, MEPs said a potential association agreement should comprise a free trade deal and separate strands on security, foreign policy and thematic areas such as aviation and research.
A senior EU official said an association agreement can’t be discussed until the UK officially leaves the EU in March 2019. (Sarah Collins)