EU, Britain still face major hurdles after divorce deal

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Brussels (AFP)

With Britain's terms of divorce from the EU clinched on Friday, the two sides now face major hurdles to agree a transition period and future trade ties in less than a year.

European Union President Donald Tusk said that in fact "the most difficult challenge is still ahead" because it is much harder to break up and build a new relationship than just to divorce.

"We have de facto less than a year," Tusk added.

The EU wants the final version of the full withdrawal agreement from the 28-nation bloc ready by October 2018 to allow time for the British government and the European Parliament to approve the document.

The formal withdrawal date is set for March 29, 2019.

Here are some of the challenges the two sides face in the continued negotiations.

- 'Sufficient progress' -

When they meet at a December 14-15 summit in Brussels, the EU leaders must formally sign off on their negotiators' confirmation that "sufficient progress" on divorce terms have been achieved to warrant starting talks on the transition period and future trade ties.

Culminating six months of often acrimonious talks, the two sides agreed arrangements Friday for the Irish border, Britain's divorce bill, and the rights of EU citizens in Britain and British people in the bloc.

The leaders will also be asked to approve nine guidelines Tusk has sent them.

These conditions require Britain during the transition period to respect current and any new EU laws, budgetary commitments, and European judicial oversight.

Tusk noted, but did not commit to, Britain's request for a two-year transition period to reassure businesses and people.

The EU's chief Brexit negotiator Michel Barnier says the negotiations on the transition period could begin early next year, but talks on future ties would start "a bit later".

- EU needs 'more clarity' -

Tusk says the EU needs "more clarity" on how Britain views future ties after it leaves the single market of around 500 million people and customs union.

He offers Britain in return to start work on a "close partnership in trade" as well as cooperation in security, defence and foreign policy.

Such cooperation, he says, will require the adoption of additional guidelines next year.

- EU red lines -

Barnier says Britain's insistence on leaving the single market and customs union leaves Brussels with no choice but to work on a post-Brexit free trade agreement modelled on the bloc's deal with Canada.

EU trade ties with Canada are, for example, less close than those with non-EU member Norway.

He insists on the EU's own red lines on preserving the integrity of the single market with its four freedoms on the movement of goods, capital, services and labour.

But he warned: "Not everyone has yet well understood that there are points that are non-negotiable for the EU."

The European Commission, the EU executive, meanwhile raised concerns that British support for intra-Irish cooperation, including after Brexit, "seems hard to reconcile" with its plan to leave the single market and customs union.

Barnier nonetheless expects smoother sailing in the negotiations over cooperation on security, defence and foreign policy to "ensure the stability of the continent".

- Who will negotiate? -

Barnier will be tasked only with discussing the framework of future relations rather than negotiating a new trade deal as long as Britain remains part of the bloc, an EU official said.

A new mandate will be required to negotiate a free trade agreement, the official added.

- 'As quickly as possible' -

EU states insist the next phase of negotiations can only progress as long as Britain respects "in full" the commitments it undertook in the first phase and faithfully translates them in "legal terms as quickly as possible".

The European Commission also raised concerns that the deadline for EU citizens acquiring rights in Britain should be the end of the transition period rather than the country' 2019 withdrawal date.