Brexit negotiations: Government faces early blow as trade talks pushed back to October

Brexit Secretary David Davis and Michel Barnier
PA
Mark Chandler20 June 2017
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Trade talks between the UK and European Union will not begin until October at the earliest in a blow to the Government’s Brexit negotiations.

The Government had wanted the talks to take place in parallel with its current negotiations but has now accepted the timetable set out by the EU's chief negotiator Michel Barnier.

European Commission official Mr Barnier warned the UK faced "substantial" consequences as a result of Brexit but insisted it was "not about punishment" or revenge.

And in a reference to Prime Minister Theresa May's negotiating mantra, he said: "For both the European Union and the United Kingdom, a fair deal is possible and far better than no deal."

After the first day of the crucial negotiations which have the potential to shape the UK's economic and political future for a generation, it was agreed that working groups of officials would aim to make progress on the issues of citizens' rights, the UK's financial settlement - the so-called divorce bill - and other issues to do with separation.

The most senior officials on either side will lead work on efforts to resolve the problem of the border between Northern Ireland and the Republic of Ireland, a situation Mr Barnier acknowledged was "politically sensitive" at a time when the Tory government was seeking the support of the Democratic Unionist Party to prop up Mrs May's minority government.

Only when "sufficient, concrete progress" on the first phase has been made will Mr Barnier recommend to the European Council that the negotiations can enter the next stage, taking in the future trading relationship, with that recommendation possibly coming at October's summit of EU leaders.

After seven hours of talks in Brussels, David Davis - who had previously promised the "row of the summer" over the timetable for the negotiations - said he was optimistic about the talks.

Both sides acknowledged the clock was ticking, with the date for the UK's departure from the EU fixed for March 2019.

Mr Davis denied suggestions the agreed timetable showed Britain's "weakness" and insisted it is "completely consistent" with the Government's aim of parallel trade and exit talks.

"It's not when it starts it's how it finishes that matters," he said.

"The UK has been crystal clear in our approach to the negotiations, the withdrawal process cannot be concluded without the future relationship also being taken into account.

"They should be agreed alongside each other, this is completely consistent with the Council's guidelines which state nothing is agreed until everything is agreed."

Mr Davis also brushed off the idea Britain's negotiating stance could change given political instability in the UK.

The Brexit Secretary said: "The position hasn't changed, we have the Lancaster House speech, the two white papers, and the Article 50 letter, all backed up by a manifesto too.

"So it's the same as it was before."

Asked if he had given any ground to Britain, Mr Barnier said: "I am not in a frame of mind to make concessions, or ask for concessions.

"It's not about punishment, it is not about revenge.

"Basically, we are implementing the decision taken by the United Kingdom to leave the European Union, and unravel 43 years of patiently-built relations.

"I will do all I can to put emotion to one side and stick to the facts, the figures, and the legal basis, and work with the United Kingdom to find an agreement in that frame of mind."

He added: "The United Kingdom has decided to leave the European Union, it is not the other way around.

"The United Kingdom is going to leave the European Union, single market and the customs union, not the other way around.

"So, we each have to assume our responsibility and the consequences of our decisions.

"And the consequences are substantial."

In a sign of the progress that has been made, Mr Davis said the Prime Minister would brief fellow EU leaders at a summit on Thursday on the UK's approach to the rights of expatriate citizens, which will be set out in detail in a paper on Monday.

Mr Davis also acknowledged he "very sensitive" issue of the Irish border may not be resolved until near the end of the Brexit talks

The Brexit Secretary said it could take "until the end of the process" to resolve the issue, because it will be tied in with the trade and customs deals the UK is able to strike with Brussels.

Both the UK and EU are determined to avoid the return of a hard border between Northern Ireland the Republic of Ireland or anything that could undermine the Good Friday Agreement.

Mr Davis said: "We discussed two aspects of it. One of course is the political sensitivities which everybody understands.

"The other is the determination to maintain an, as near as possible, invisible border so we do not undermine the peace process, do not provide any cause for concern in Northern Ireland.

"This is a technically difficult issue but it is one which I am certain is soluble, although it will probably take us until the end of the process when we have already decided what our customs and free trade arrangements are."

Mr Barnier, who was a senior EU official involved in the peace process, acknowledged that "this is one of the most sensitive issues before us" and there was an "awful lot of work to do".

The situation could be complicated by the potential deal between Theresa May's Tories and the Democratic Unionist Party as she seeks support for her minority administration in Westminster.

Mr Barnier said: "There is a very, very sensitive political dimension to this.

"The new Northern Irish executive needs to be set up in a few days' time, at the same time we have a new government and a new Taoiseach in Dublin and of course there are the ongoing political discussion in London which we are also following closely."

He said the EU wanted to "preserve all the dimensions and commitments of the Good Friday Agreement" and maintain the UK-Ireland common travel area.

"The other problem in parallel with that is that without creating a new hard border, at the same time we have to come up with solutions - especially for goods and services - but in a way that is compliant with the normal rules and integrity of the internal market.

"So we have got a very sensitive political context, a very clear objective which is to preserve all the dimensions of the Good Friday Agreement and we have an awful lot of work to do - bilaterally, and also in coordination with the Dublin government on my side, so that we come up with imaginative and concrete solutions along the lines I have described, particularly taking into account the single market."

A special dialogue involving senior negotiators from each side has been set up to consider the issue, with Mr Davis' senior mandarin Olly Robbins holding talks with Mr Barnier's deputy Sabine Weyand on the issue.

Additional reporting by the Press Association.

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