The United Kingdom is desperate to secure a trade pact with the European Union as negotiations begin on their unwinding.
That’s one takeaway from a letter delivered on Tuesday by Prime Minister Theresa May to Donald Tusk, president of the European Council, that touches off what is likely to be two years of negotiations with the aim of untangling the U.K. from a pact that has governed its relations with the Continent for nearly half a century.
The six-page missive emphasizes what May terms a “deep and special partnership” between Britain and the EU that encompasses cooperation on both the economy and security. Thus, she writes, it will be necessary for the sides to come to terms on a relationship that will govern after Brexit. As May writes:
“This should be of greater scope and ambition than any such agreement before it so that it covers sectors crucial to our linked economies such as financial services. This will require detailed technical talks, but as the UK is an existing EU member, both sides have regulatory frameworks and standards that already match.”
In short, she wants a substitute for the single market that members of the EU, including Britain, currently enjoy. A failure to negotiate such a pact, would leave the U.K. to trade under rules set by the World Trade Organization. And as the Economist explains, that may present challenges for all parties.
“If Britain broke free from the EU, but kept the common external tariff in place, then a company moving parts between the EU and Britain could potentially face a tariff charge every time a border was crossed. Countries whose producers were hit by this development might make life difficult elsewhere for British negotiators.”
May warns that failure to come to terms on trade also “would mean or cooperation in the fight against crime and terrorism would be weakened.” Though the pacts that govern security and defense tend to exist independently of the EU, both judicial cooperation and trade disputes are heard by the European Court of Justice. May has vowed that Britain will fall outside the jurisdiction of the ECJ after Brexit.
There will be plenty to hammer out besides trade. That includes the status of EU citizens living in the U.K. and citizens of the U.K. who live in Europe. It also includes the parties’ ability to preserve an open land border between the U.K. and the Republic of Ireland, which belongs to the EU.
Of course, the EU has a say as well. Talks on unwinding and trade “will not happen” concurrently, Tusk said on Thursday.