Trade Pacts

Britain’s apparent determination to pursue trade talks with countries outside the EU could significantly undermine its efforts to negotiate a favourable Brexit deal and may well be illegal, diplomats and officials have warned.

Theresa May meets Donald Trump on Friday to discuss a post-Brexit transatlantic trade deal the president has said he would like drawn up “quickly”, while Australia has said talks this week should “begin to lay the foundations” of a similar pact with the UK.
But EU officials and diplomats say that while no one can stop Britain talking to future trade partners, any concrete attempt to negotiate free-trade agreements before Britain leaves the bloc could rapidly sour Brexit negotiations. 

“They do need to be careful about this,” said one London-based EU27 diplomat. “No one will object to broad preliminary talks, but anything that looks like proper negotiations … That would certainly not be well received.” 

Another diplomat in Brussels said the prime minister and her trade team could “obviously have candid informal discussions”, but cautioned it would “not be constructive if the UK did engage in actual negotiations”.

The prime minister has said she intends to capitalise on Brexit by making the UK a leading global free trade champion, negotiating new agreements with countries such as the US, China, India, Australia and New Zealand.
The international trade secretary, Liam Fox, has said the UK is “discussing the possible shape of new agreements” with at least 12 countries, adding that dozens more were prepared to expand their UK trading links.

Besides the risk of antagonising the EU at a time when Britain will be seeking to strike the best possible exit deal with the bloc, formal trade talks with countries outside the EU could also be illegal until Britain leaves. 

EU states cede their right to sign trade deals to the European commission in Brussels and are formally prohibited from pursuing their own agreements.
“Under EU law, no member state discussions on trade agreements – as opposed to commercial deals, like selling planes – with non-EU countries are possible at all,” said Steve Peers, professor of EU law at the University of Essex.
However, Peers said it could be argued that “since it is leaving the EU, the UK is not fully bound by that rule at long as it does not actually conclude any treaties before Brexit day. The legal position is not certain.”

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