Published: 23 June 2017
Area of Law: Brexit
Swings and roundabouts
There are signs that the UK Government is starting to appreciate the scale of the challenge of the Brexit negotiations.
The first question facing the UK and EU was how the negotiations should be sequenced. In the Article 50 letter, Theresa May made clear that the UK wanted to deal with trade talks in parallel with the separation agreement. In contrast, the EU released a series of documents that locked in a legally binding negotiating structure preventing trade talks until “sufficient progress” is made on the difficult questions of citizens’ rights, the Irish Border and the Brexit bill.
These two approaches were incompatible. David Davis noted in May 2017 that the UK would be disadvantaged by having to agree the financial settlement before addressing trade and said that the debate over sequencing would be “the row of the summer”.
However, when negotiations started on 19 June Mr Davis immediately acquiesced to the EU’s position and both sides have now agreed to deal with separation before turning to the future relationship.
This is a significant U-turn and may be reflective of the post-election politics and changing UK negotiating objectives.
As we have said elsewhere, there is a significant risk that the negotiations will now get bogged down in debate over the exit bill.
This means that the prospect of a trade deal being in place by 29 March 2019 is now even more unlikely. Businesses need to start planning for a difficult Brexit now. This will take time and businesses that plan the earliest will secure the biggest advantages.
Read our latest Brexit insights report for more information on the direction of the first phase of negotiations and what this means for businesses.