The European Union's draft negotiating guidelines for Brexit are uncompromising on core principles but have flexibility to allow for a deal acceptable to both sides.
After the warm words of Theresa May's letter to Donald Tusk on Wednesday, with its references to shared values and a deep and special relationship, the EU response was brisk and businesslike. The draft negotiating guidelines Mr Tusk issued on Friday morning waste no time on platitudes before stating flatly that the EU's objective in the Brexit talks will be "to preserve its interests, those of its member states, its citizens and its businesses".
Mr Tusk proposes a phased approach to negotiations, starting with the details of the divorce settlement before moving on to a framework for future relations between the EU and Britain. The first phase would aim to settle the issue of Britain’s rights and obligations as it leaves the EU – in other words, how much it has to pay – as well as the rights of EU citizens in Britain and British citizens in the EU.
Ireland’s position
In a victory for Irish diplomatic efforts in recent months, the guidelines explicitly recognise Ireland’s concerns over Brexit’s impact on the peace process, the Border and the Common Travel Area as a priority in the negotiations.
Britain hoped to negotiate the divorce and the future arrangements in parallel and Mr Tusk suggests that parallel talks could begin in a few months if there is “significant progress” on the divorce settlement. There is some wriggle room, too, on one of the most neuralgic issues for Britain, the size of the bill it will have to pay as it leaves the EU.
The money will be discussed at the start of negotiations, and the guidelines call for a "single financial settlement" of Britain's obligations. But Malta's prime minister Joseph Muscat, whose country holds the EU's rotating presidency, said on Friday that the two sides would only have to agree the methodology for calculating the bill, rather than the actual sum, during the first few months of talks.
Although a free trade agreement cannot be concluded until after Britain has left the EU and become a “third country”, the guidelines suggest that “an overall understanding on the framework for the future relationship” could be agreed during the talks under article 50.
Mr Tusk draws a few red lines on that agreement, making clear that it cannot be as advantageous to Britain as membership of the EU and the single market. The document rules out sectoral deals for access to the single market, such as British ministers have suggested for the car industry, and goes on to say that Britain will have to drop its threat to become an offshore, deregulated tax haven after Brexit.
Transitional arrangements
The guidelines foresee the need for transitional arrangements after Brexit but insist they “must be clearly defined, limited in time, and subject to effective enforcement mechanisms”. The guidelines also make clear that the EU will not accept any trade dispute resolution arrangement with Britain which affects the EU’s own decision-making procedures. This sets up a battle with Britain over the future role of the European Court of Justice, which Ms May has promised will no longer have any role in Britain.
Mr Tusk’s document says the EU wants the negotiations to succeed but will prepare for the possibility of failure. The draft guidelines can be amended over the next few weeks before EU leaders sign off on them on April 29th. But the document makes clear that, from now on, the EU must speak with one voice on Brexit, with no bilateral negotiations between London and European capitals.
