Tusk luck, May

31 March 2017

EU Council President Donald Tusk has sent negotiation guidelines to European capitals in advance of a summit at the end of April 2017 to determine the agenda for Brexit negotiations. Tusk’s document sets out three sequential stages for the Brexit negotiations, which conflicts with UK Prime Minister Theresa May’s proposal for negotiations regarding withdrawal and trade to be undertaken simultaneously.

Tusk sets out the following guidelines:

Money, money, money - Money will dominate discussions in the first phase of negotiations, as the UK and the EU establish terms for their divorce. Britain has financial commitments relating to pensions for EU staff and ongoing projects. Although British Chancellor of the Exchequer, Phillip Hammond, did not earmark funds for Brexit in this year’s budget, he has said that his plans include reserves to deal with Brexit. These reserves are likely to be called upon to fulfil the financial settlement agreed during the second phase of negotiations.
Trade - A trade deal between the UK and the EU will then be negotiated. Negotiators will be under pressure to decide the first agenda item quickly to allow enough time for trade negotiations. May conceded, when she announced the triggering of Article 50, that the UK cannot “cherry-pick” inclusion in the single market, the European trade bloc enjoying reduced trade barriers. Note that the UK cannot officially negotiate independent trade deals with other countries until it has left the EU.
Transition – The development of transitional arrangements to facilitate the move toward a new relationship will be decided during the third stage of negotiations. Transition is currently expected to take between two and five years after the UK leaves the EU.

The EU’s chief negotiator, Michel Barnier, had proposed to the EU Parliament on Wednesday 29 March 2017 that the first stage of negotiations be dedicated to removing threats on “people, money and borders”. May has also assured the UK Parliament that securing the rights of EU nationals would be the first topic of negotiations. It might be that the creation of a good atmosphere for negotiations will serve as an informal first phase of negotiations and that securing the rights of EU nationals in the UK and of UK nationals in the EU will be addressed before or during the first official stage of negotiations.

Bernier expects to begin negotiations in June and the UK is scheduled to exit the EU on 29 March 2019.