14 Dec 2017

The EU27 will likely sign off on the Brexit divorce agreement tomorrow – so what next on trade and the timetable

There are as many interpretations of last night’s government defeat on Brexit as there were rebels. Possibly more. What we can say with certainty is that it adds to the number and range of possible outcomes.

Ever since this Parliament was elected it has looked like it has a majority that could form against “no deal” and a “walkout” approach, a reversion to WTO rules in lieu of an agreement with the EU. It’s one of the drivers that’s made prominent Brexiteers accept the costs and compromises of the Brexit divorce deal.

Ken Clarke last night hailed the Commons vote as proof that there is a majority in favour of soft Brexit. That’s a harder one to calibrate.

In Brussels here today you sense the EU leaders are still in “managing the process” mode on Brexit. They have much else on their collective plates and are not about to re-think their Brexit approach. All the signs are that tomorrow will see them sign off on the divorce agreement. Chancellor Merkel and President Macron have indicated that is what they want and the EU, to the alarm of many, is returning to an organisation in which their dominance is hard to challenge.

The guidelines the EU produces are expected to challenge the speedier timetable that the UK had been hoping for. The usually breezy David Davis (nice piece here on the man by Politico’s Tom McTague) in the Commons today sounded an anguished note about the tight timetable ahead. The UK will be hoping for some flexibility.

The conversation amongst the EU27 on Brexit (Theresa May heads home tonight) will be attended by Michel Barnier, the chief negotiator, he’ll be listening for the tone of the EU Council members who are his instructors. Do they want to hug Britain close or keep it distant? That could influence how he conducts the next phase of negotiations. Will there be a whiff of the challenges ahead that European Council President Donald Tusk talked of today when he foresaw diverging trade interests making the Phase 2 talks much harder than what has preceded them.

The original draft communique for this European Council gathering originally said the UK would be getting a Canada style trade agreement as it had clearly rejected the only alternative, an arrangement like Norway’s.

That explicit declaration has been removed at the request of the UK. With Cabinet ministers getting their first discussion of the subject on Monday and Tuesday, No. 10 didn’t want the whole discussion pre-judged. But even as EU leaders tried to encourage Theresa May today they also urged the UK government to clarify what future relationship it wants. Dutch PM Mark Rutte said Mrs May remained a “formidable” leader but Britain needed to get a move on.

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