Why are the Brexit trade talks held up by the divorce talks?

Question

In order to provide certainty for businesses and bureacrats, to a layman it appears practical for Britain to carry out trade talks with the European Union in parallel with the divorce talks.

Yet the consistent message I hear through the news media is that progress must be made on the divorce talks before the trade talks can begin. The divorce issues that seem to have been most difficult over the last few months seem to have been:

• the rights of EU citizens living in the UK
• the land border between Ireland (the Republic of Ireland) and Northern Ireland
• the 'Brexit bill', the contribution that the UK will pay to the EU budget above its annual commitments to 2019

I have heard various sources, including the leading EU officials, and German government ministers, insist these divorce issues are agreed before trade talks begin. Meanwhile the British negotiators seem to accept this.

Not only do I not know what the reason is, I don't even know whether the reason is political, a negotiating tactic by one or more party to the talks, technical (for some legal or bureaucratic reason), or logistical (such as appointing a sufficient number of officials to conduct multiple parallel negotiations.)

In searching for the reason, I found a BBC article that says the Irish government has asked for progress on the land border before trade talks begin. But I haven't found any other solid, neutral analysis of the reason(s) that the talks are organized sequentially instead of in parallel.

Update these related answers describes the content of the talks in 2017, but not the structure.

Answer 1

This might be described as an "eat your vegetables" strategy by the EU27.

The three preliminary issues are not palatable to the UK government:

• It is reluctant to discuss the divorce bill. Paying any money at all to the EU will be unpopular, especially in the wake of false promises by the Leave campaign about money saved by Brexit.

• It is reluctant to guarantee the status of EU citizens in the UK. In part this is because of anti-immigration sentiment in the UK; it also has openly talked about using these citizens as a bargaining chip in subsequent trade negotiations.

• It is unwilling to offer guarantees of an open border between Northern Ireland and the Republic of Ireland; because this would require either remaining in the EU customs union, or establishing customs checks between NI and the rest of the UK.

By contrast, the UK is very interested in successful trade talks with the rest of the EU. The future of key UK industries such as pharmaceuticals and banking will be heavily dependent on cooperation with the EU. If trade talks were ongoing, the UK might ignore the above three issues, or try to use them as leverage to gain more favourable trade terms.

So, the EU27 insist on sufficient progress with the preliminary issues (vegetables) before moving on to the UK's preferred topic of trade (ice cream).

The reason the EU27 can set the agenda in this way is twofold:

• They are much bigger than the UK, as discussed in relation to this question

• So far the EU27 governments are presenting a united front; UK attempts to "divide and rule" have been notably unsuccessful.

Answer 2

Almost the first set of talks that were held about Brexit were about the order in which things were happening. The UK wanted to do things in parallel. The EU said no, we need to settle things like the financial commitments first and in the end the UK negotiators agreed to that.

They really had no choice though, as negotiations require two parties. The UK has no way to force the EU to talk about anything until the EU is ready to do so. The EU has said that unless you agree things like the settlement bill we won't discuss anything else.

The UK is in a much weaker negotiation position than the EU (at least in part because our negotiating team seems to have no idea what they actually want) and as a result has very little leverage.

Answer 3

The process of leaving the EU is governed by Aritcle 50 of the Lisbon Treaty. This article requires the EU to negotiate the terms of the withdrawal on the basis of the Treaty on the Functioning of the European Union. The EU has decided that it will prioritise the rights of its citizens and the UK's financial obligations, based on the provisions of that treaty.

The UK can do very little about this, other than plead with the EU to allow trade negotiations to start or threaten to leave without a deal, which would have much more severe consequences for the UK than for the EU.

So the reason is that the EU is negotiating based on its own interests, and the UK's position is extremely weak so it has little option but to go along with it.

Answer 4

Another way to look at it is that it is not "..practical for Britain to carry out trade talks with the European Union in parallel with the divorce talks."

This is because the basis for trade with the EU is the rules that govern trade. These include

• freedom of movement
• taxes and tariffs
• border controls

As the nature of the separation is not clear, the rules that apply are not clear. Until the scope of freedom of movement and other rules are set it is not possible to discuss trade. Until the nature of the divorce is set it is not possible to set the rules.

For example, if there was a "hard Brexit" option then there would be no freedom of movement whatsoever. If there was a "soft Brexit" option then freedom of movement would be possible. Until these basics are decided it's not possible to get started on a trade agreement which would build on them.

The UK government has been unclear on what its position is on these basic rules, to the extent that anyone talking to them cannot assume anything. If you just google the various cabinet members and try and work out their position on any "hard" or "soft" options you will see that it is a point of view that is impossible to pin down.

The reason that it has to be this way is that the common rules are what binds the EU 27 together. If the UK is talking to the 27 it is via the mediation of these rules. So all talks begin in this place.

All trade within the EU 27 has to be within the scope of agreed rules that govern trade. So if the UK wants to trade with the EU 27 they must do this using a set of agreed rules. Agreeing on these rules is essentially what the "divorce settlement" is. And agreeing to the rules is pretty difficult. The Canada deal (CETA) took several years end to end because it included these types of rules.

Answer 5

According to Article 50 of the Lisbon Treaty, the EU should negotiate a withdrawal agreement with the Member State that has decided to leave. The membership ends with the conclusion of that agreement or at most two years after the initial notification or even later if both decide to extend this period.

That means that there is still time to negotiate a divorce agreement and a future trade agreement. Obligations like outstanding payments must be honored, although the opinion which legal obligations there are might differ.

The rest like the future rights of citizens or future trade conditions after the exit of Britain from the EU are completely negotiable and purely optional. If no agreement is achieved there, the relations will be as towards any non EU State.

In such negotiations nothing is agreed until everything is agreed, so the timely order of the talks is formally not significant.

However, for tactical reasons, the timing of negotiations is of particular importance. Currently there is a stalemate because the EU wants to have an agreement about the divorce agreement first and Britain doesn't for reasons well explained in another answer. At some point in time one or both negotiation partners might move their position.

While any agreement now would be formally meaningless until everything is agreed, de-facto it would be hard to go back any previously made concession. In this phase of the negotiations, both parties try to avoid that. The current state of the negotiation reflects these tactical considerations.

However, coming to any desired agreement still takes time, so we can expect that later, when less negotiation time will be left, much more action takes place. So far, both parties are more afraid of making too many concessions than of letting time run out. This will change for sure.

We can only wait until the end of the negotiations and then see what were the outcomes for the divorce and trade talks. The current state doesn't allow to conclude much about the eventual outcome.

It's only negotiation tactics so far, some skirmishes. The real difficult "diplomatic battles" will follow later.

Answer 6

In addition to the other answers provided, many of the politicians in power in EU countries have their seats and jobs threatened by new or resurgent parties urging for Frexit, Grexit, Deuxit.

EU negotiators are not just in this negotiation to get a good outcome for the EU, they are in it to get a bad outcome for Boris Johnson and the UK. Doing this will disincentivise further EU defections, help to keep the rest of the EU together, and keep their party colleagues in their jobs.

The EU negotiators will also be looking at the long term - inevitably, the UK will either cancel Brexit, or they will rejoin the EU at some later stage. The UK has always had special treatment within the EU framework. The EU is setting up for later negotiations, to reduce the ability for the UK to apply for that special treatment when they rejoin.