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What happens next

After months of speculation, Article 50 has now finally been triggered. However, those who were expecting this to mean we would finally enter the ‘meat’ of the Brexit negotiations are likely to be disappointed. The coming weeks will see a continuation of the stand-off which has characterised the nine months since last June’s referendum.

There will however be one notable exception – the EU’s initial response to Theresa May’s letter.

In his statement this morning Tusk made it very clear he believed there would be no winners on either side at the end of the negotiations and this would be a process of damage limitation. He was also keen to stress that the EU 27 united and determined to protect the interests of their citizens and business and would do ‘everything in their power’ to minimise the risks on their side.

Within 48 hours, we can expect to see Donald Tusk, President of the European Council, circulate draft negotiating guidelines to the EU’s 27 remaining member states. These guidelines will ultimately form the basis of the European Commission’s negotiating position but, before that can happen, they must be signed off by the Council.

The EU27 hoped to discuss and, ideally, agree these guidelines at a special summit on April 6, but the timings were considered too tight once the UK confirmed it would not trigger Article 50 until the end of March. Last week Donald Tusk confirmed that a special summit would be held on April 29 instead. Even this timing has been questioned due to it falling between the two rounds of voting for the French presidential election, which could mean further delays.

While the EU’s guidelines will give us a better understanding of how negotiations will develop, they will not herald the start of significant talks.

Before this can begin, the EU must formally mandate the EU Commission, and its lead negotiator Michel Barnier, with the power to represent the EU27. This process will involve further, private, negotiation between member states and is likely to add a further delay of around a month.

Once talks do begin, likely to be around June, major questions still remain over what can actually be substantially discussed. The leadership of the EU’s biggest economy, Germany, will remain unclear until the Autumn. Moreover, Barnier has repeatedly said he would not proceed with any negotiations on the shape of the future UK-EU trading relationship until the “divorce bill” is agreed. By contrast, the UK insists the terms of withdrawal and the future relationship must be negotiated simultaneously.

A further layer of difficulty comes in the form of Article 218. This is the device which enables the EU to make trade agreements with ‘third countries or international organisations’. Yet the UK will not be a “third country” until the 2-year Article 50 period has expired. There are many voices across the EU who do not believe Michel Barnier and his team should be given the mandate to negotiate aspects of the UK’s relationship with the EU post-Brexit, such as a trade deal, until the sticking points of exit are agreed.

The negotiating period will also be squeezed at the other end of the process. Any deal negotiated between the UK and the European Commission will need to be ratified by the European Council of 27 remaining member states, as well as the European Parliament. This could take as long as six months, leaving an effective negotiation period of not much more than a year.

To conduct one of the most complicated multilateral negotiations in diplomatic history in such a limited time period seems an almost impossible task, and significantly raises the likelihood of the UK crashing out with no deal. It is no surprise that UK Ministers are talking increasingly seriously of UK-EU trade defaulting to WTO tariffs – an outcome which most believe would hurt all sides.

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