On Friday 8 December 2017, high-level negotiators from the United Kingdom of Great Britain and Northern Ireland (UK) and the European Union (EU) reached a last-minute agreement to keep the Brexit negotiations on track. The EU has, from the beginning, insisted that negotiations about future UK-EU trade could only start once an agreement about the Irish border, the payment of the UK’s divorce bill, and the position of EU citizens in the UK has been reached. This has now happened; in the form of a Joint Report on Progress during Phase 1 of Negotiations under Article 50 TEU on the United Kingdom’s orderly Withdrawal from the European Union.

The European Council met on 14-15 December 2017 to adopt this Report. It has also issued Guidelines for the next phase of the negotiations, which should result in a final withdrawal treaty. It must be ratified by the 27 EU members and the UK Parliament, before the UK leaves the EU at the end of March 2019.

The next phase will apparently also involve negotiations about a transition deal to cover a period of up to two years after Brexit, and a “framework” for future EU-UK trade. The parties must decide how they will eventually trade with each other. The UK wants a deep and special deal, but the EU says a future trade agreement can only be finalised once the UK has left the EU.

This Trade Brief discusses the content of the Report of 8 December and speculates about the negotiations which lie ahead.

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