Brexit: Theresa May calls for unprecedented UK-EU economic partnership

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00:31 mins.
02.03.2018

May calls for close UK-EU economic cooperation

British Prime Minister Theresa May has tried to breathe new life into the Brexit negotiations. The European Union has blamed British officials in recent weeks for a lack of progress during the talks.

The UK and the European Union should agree to an unprecedented economic relationship following Brexit, British Prime Minister Theresa May said during Friday's highly anticipated Brexit speech.

The speech comes amid growing EU frustration at what it has claimed are unrealistic British demands in divorce talks ahead of March 2019, when the UK plans to leave the bloc.

What May said:

  • The UK's post-Brexit economic partnership with the EU should be deeper than any free trade deal that currently exists. May rejected an agreement based on the existing trade deals Norway and Canada have with the EU: "We need to strike a new balance. But we will not accept the rights of Canada and the obligations of Norway."
  • Brussels and London should agree to a type of Brexit that does not threaten peace in Northern Ireland by reintroducing a hard border between the Republic and the North: "We have been clear all along that we don't want to go back to a hard border."
  • Solving the border problem by keeping Northern Ireland in the EU customs union would be unacceptable, however. Doing so would break up the UK's internal market and "damage the integrity of our precious Union [the UK]."
  • British and EU regulations "will remain substantially similar in the future," while Britain would seek to stay in some EU regulatory agencies. But the British Parliament would have the right to vote on regulations that are different from the continent's. This and customs checks based on new technologies would help ensure trade remains "as frictionless as possible."
  • Any final Brexit treaty with the EU would have to meet five tests: "Implementing the decision of the British people; reaching an enduring solution; protecting our security and prosperity; delivering an outcome that is consistent with the kind of country we want to be; and bringing our country together, strengthening the precious union of all our people."

Brexit negotiations: What are the key issues?

Two phases

EU leaders agreed to negotiating guidelines during a summit in April 2017 that divided the divorce talks into two phases. Phase I, in which both sides aimed to settle the basic terms of Britain's departure, started in July and ended with an agreement on "sufficient progress" in December. Officials are now holding Phase II negotiations on the post-Brexit relationship between Britain and the EU.

Brexit negotiations: What are the key issues?

The "Brexit Bill"

London agreed to a formula for calculating what it owes in its "divorce bill" to the EU in early December after months of haggling by British officials. The current EU budget expires in 2022 and EU officials have said the divorce bill will cover financial obligations Britain had committed to before triggering article 50. The final bill will reportedly total around £50 billion (€67 billion).

Brexit negotiations: What are the key issues?

Citizens' rights

Both sides agreed in early December that the 3 million EU citizens currently in Britain and the 1.1 million British citizens in the EU keep their residency rights after Brexit. British courts will have immediate jurisdiction over EU citizens living in Britain. But the EU's highest court, the ECJ, can hear cases until 2027 if British judges refer unclear cases to them.

Brexit negotiations: What are the key issues?

The Irish border

Britain and the EU also agreed in December that no border checks between the Republic of Ireland and Northern Ireland would return post-Brexit. How feasible the commitment will be is unclear, as Britain's commitment to leaving the EU Single Market and Customs Union makes it difficult to avoid customs checks at the Irish border.

Brexit negotiations: What are the key issues?

Transition period

Theresa May envisages a two-year transition period after March 2019. Both sides still have to hash out the details of the transition period in Phase II, including the exact end-date, whether new EU laws passed during the period will apply to Britain, and whether Britain can negotiate its own free trade deals. British officials hope to agree on the terms of the transition by March 2018.

Brexit negotiations: What are the key issues?

Trade

May has repeatedly said Britain will leave the European Single Market and the EU Customs Union. Leaving both could disrupt British-EU trade, but allow Britain to negotiate its own free trade deals and restrict EU migration — key demands by pro-Brexit politicians. London has said it wants to negotiate a new EU-UK trade deal during Phase II to minimize trade disruption before March 2019.

Brexit negotiations: What are the key issues?

Immigration

Britain has also vowed to restrict EU migration into Britain after Brexit. However, some British lawmakers are wary that a sharp drop in immigration could lead to shortfalls in key sectors, including health, social care and construction. The EU has warned that Single Market access is out of the question if London decides to restrict the ability of its citizens to live and work in Britain.

Brexit negotiations: What are the key issues?

Security

Recent terror attacks across Europe including a string in Britain underline both sides' support for continued security cooperation after March 2019. But access to EU institutions such as Europol and programs such as the European Arrest Warrant require compliance with EU laws. Whether Britain will still be compliant after it leaves is unclear.

Barnier welcomes 'clarity:' The EU's chief negotiator, Michel Barnier, said he welcomed the "clarity" offered by May's speech. Barnier tweeted: "Clarity about UK leaving the Single Market and Customs Union & recognition of trade-offs will inform EUCO (European Council) guidelines re: future FTA," referring to the proposal EU leaders are set to make next week on a future free trade agreement.

Little progress: May's speech came at a time when Brexit negotiations appear to be making little progress. On Thursday, EU Council President Donald Tusk challenged Britain to present ideas on how to prevent a hard border in Ireland after May rejected an EU proposal to the problem. Tusk had previously said Britain's position was "based on pure illusion" after media outlets reported Britain wanted to pick and choose which EU rules to align with after Brexit.

Read more: Brexit: EU warns Britain of 'unavoidable' trade barriers if it leaves customs union

May's reaction to EU Brexit treaty: Michel Barnier, presented a first draft Brexit treaty on Wednesday that aimed to define the future legal relationship between Britain and the EU after 2019. May called the draft "unacceptable," in part due to a provision that Northern Ireland stay in an EU customs union with if London and Brussels failed to find another solution to the Irish border problem.

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Read more: Ireland's Brexit border: The devil is in the detail

Why the Irish border is controversial: The government in the Republic of Ireland and some political parties in Northern Ireland have dismissed the return of any checks along the common border. However, London's decision to leave the EU customs union and single market in favor of pursuing its own trade deals means that, under current laws, a hard border in Ireland would be unavoidable.

What happens next: Leaders from the other 27 EU member states are set to decide on a transition period during a summit at the end of March. London and Brussels have agreed there should be a transition, but have yet to settle on the details.

EU-27 leaders are also expected to draw up negotiation guidelines for the post-transition relationship at the summit.

DW editors send out a selection of the day's hard news and quality feature journalism. You can sign up to receive it directly here. 

Brexit timeline: Charting Britain's turbulent exodus from Europe

June 2016: 'The will of the British people'

After a shrill referendum campaign, nearly 52 percent of British voters opted to leave the EU on June 23. Polls had shown a close race before the vote with a slight lead for those favoring remaining in the EU. Conservative British Prime Minister David Cameron, who had campaigned for Britain to stay, acknowledged the "will of the British people" and resigned the following morning.

Brexit timeline: Charting Britain's turbulent exodus from Europe

July 2016: 'Brexit means Brexit'

Former Home Secretary Theresa May replaced David Cameron as prime minister on July 11 and promised the country that "Brexit means Brexit." May had quietly supported the Remain campaign before the referendum. She did not initially say when her government would trigger Article 50 of the EU treaty to start the two-year talks leading to Britain's formal exit.

Brexit timeline: Charting Britain's turbulent exodus from Europe

March 2017: 'We already miss you'

May eventually signed a diplomatic letter over six months later on March 29, 2017 to trigger Article 50. Hours later, Britain's ambassador to the EU, Tim Barrow, handed the note to European Council President Donald Tusk. Britain's exit was officially set for March 29, 2019. Tusk ended his brief statement on the decision with: "We already miss you. Thank you and goodbye."

Brexit timeline: Charting Britain's turbulent exodus from Europe

June 2017: And they're off!

British Brexit Secretary David Davis and the EU's chief negotiator, Michel Barnier, kicked off talks in Brussels on June 19. The first round ended with Britain reluctantly agreeing to follow the EU's timeline for the rest of the negotiations. The timeline split talks into two phases. The first would settle the terms of Britain's exit, and the second the terms of the EU-UK relationship post-Brexit.

Brexit timeline: Charting Britain's turbulent exodus from Europe

July-October 2017: Money, rights and Ireland

The second round of talks in mid-July began with an unflattering photo of a seemingly unprepared British team. It and subsequent rounds ended with little progress on three phase one issues: How much Britain still needed to pay into the EU budget after it leaves, the post-Brexit rights of EU and British citizens and whether Britain could keep an open border between Ireland and Northern Ireland.

Brexit timeline: Charting Britain's turbulent exodus from Europe

December 2017: Go-ahead for phase 2

Leaders of the remaining 27 EU members formally agreed that "sufficient progress" had been made to move on to phase two issues: the post-Brexit transition period and the future UK-EU trading relationship. While Prime Minister Theresa May expressed her delight at the decision, European Council President Tusk ominously warned that the second stage of talks would be "dramatically difficult."

Brexit timeline: Charting Britain's turbulent exodus from Europe

July 2018: Johnson, Davis resign

British ministers appeared to back a Brexit plan at May's Chequers residence on July 6. The proposal would have kept Britain in a "combined customs territory" with the EU and signed up to a "common rulebook" on all goods. That went too far for British Foreign Minister Boris Johnson and Brexit Secretary David Davis, who resigned a few days later. May replaced them with Jeremy Hunt and Dominic Raab.

Brexit timeline: Charting Britain's turbulent exodus from Europe

September 2018: No cherries for Britain

May's Chequers proposal did not go down well with EU leaders, who told her at a summit in Salzburg in late September that it was unacceptable. EU Council President Tusk trolled May on Instagram, captioning a picture of himself and May looking at cakes with the line: "A piece of cake perhaps? Sorry, no cherries." The gag echoed previous EU accusations of British cherry-picking.

Brexit timeline: Charting Britain's turbulent exodus from Europe

November 2018: Breakthrough in Brussels

EU leaders endorsed a 585-page draft divorce deal and political declaration on post-Brexit ties in late November. The draft had been widely condemned by pro- and anti-Brexit lawmakers in the British Parliament only weeks earlier. Brexit Secretary Dominic Raab resigned along with several other ministers, and dozens of Conservative Party members tried to trigger a no-confidence vote in May.

Brexit timeline: Charting Britain's turbulent exodus from Europe

December 2018: May survives rebellion

In the face of unrelenting opposition, May postponed a parliamentary vote on the deal on December 10. The next day, she met with German Chancellor Angela Merkel to seek reassurances that would, she hoped, be enough to convince skeptical lawmakers to back the deal. But while she was away, hard-line Conservative lawmakers triggered a no-confidence vote. May won the vote a day later.

Brexit timeline: Charting Britain's turbulent exodus from Europe

January 2019: Agreement voted down

The UK Parliament voted 432 to 202 against May's Brexit deal on January 16. In response to the result, European Council President Donald Tusk suggested the only solution was for the UK to stay in the EU. Meanwhile, Britain's Labour Party called for a no-confidence vote in the prime minister, her second leadership challenge in as many months.

Brexit timeline: Charting Britain's turbulent exodus from Europe

March 2019: Second defeat for May's deal

May tried to get legal changes to the deal's so-called Irish backstop in the weeks that followed. She eventually got assurances that the UK could suspend the backstop under certain circumstances. But on March 12, Parliament voted against the revised Brexit deal by 391 to 242. EU leaders warned the vote increased the likelihood of a no-deal Brexit. Two days later, MPs voted to delay Brexit.

Brexit timeline: Charting Britain's turbulent exodus from Europe

March 2019: Extension after second defeat

Following the second defeat of May's divorce deal, the European Council met in Brussels on March 21 to decide what to do next. EU leaders gave May two options: delay Brexit until May 22 if MPs vote for the withdrawal deal or delay it until April 12 if they vote against the deal. If the deal were to fail again in Parliament, May could ask for a long extension.

Brexit timeline: Charting Britain's turbulent exodus from Europe

March 2019: Brexit deal rejected a third time

On March 29, the day that the UK was supposed to leave the EU, British lawmakers voted for a third time against May's deal — rejecting it this time with a vote of 344 to 286. Following the latest defeat, May approached the main opposition Labour leader Jeremy Corbyn in an attempt to find a compromise, angering hardline Brexiteers in her own Conservative party.

Brexit timeline: Charting Britain's turbulent exodus from Europe

April 2019: Brexit delayed until Halloween

With the April 12 deadline looming after the third defeat of May's deal, EU leaders met again in Brussels to discuss a second delay. The only question was how long should it be? In the end, the UK and EU agreed to a "flexible" extension until October 31 — which can end sooner if the Brexit deal is approved. If the deal isn't ratified by May 22, the UK would have to take part in European elections.

Brexit timeline: Charting Britain's turbulent exodus from Europe

May 2019: Prime Minister Theresa May resigns

Weeks of talks between Prime Minister Theresa May and the Labour party to reach a deal proved unsuccessful and further eroded her political capital. She triggered an angry backlash from her party after she tried to put the option of a second referendum on the table. The series of failures led May to announce her resignation, effective June 7, in an emotional address.

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