Theresa May will urge EU leaders to be “imaginative and creative” about a future trading deal with the UK as she maps out for the first time details of a proposed two-year ‘transition’ deal.
In an appeal for progress on the stalling Brexit talks, the Prime Minister will use a speech in Florence to remind the EU it is in “all of our interests” for the negotiations to succeed, ahead of the remaining 27 countries deciding whether to agree to move to the next stage of talks in October.
According to reports, May’s proposed interim deal before quitting will include saying the UK is willing to pay £20bn in ongoing contributions.
The PM will says that for the two-year period the UK will continue to abide by EU laws and free movement of people in return for access to the single marker for that time, but EU migrants will lose the right to stay indefinitely.
But when the interim period ends, the UK will expect a generous trade deal.
Her words will come just a day after the EU’s chief negotiator warned of “major uncertainty” around the key issues of citizens’ rights, the financial settlement and the Irish border – all things which need to have “sufficient progress” before trade talks can begin.
May’s address in the historic Italian city is likely to be more conciliatory than previous Brexit speeches, where she has talked up the prospect of accepting “no deal” and even accused EU officials of using “threats” against the UK.
Speaking at around 2pm on Friday, May is expected to set out some concrete proposals for the terms of an interim deal with Brussels after March 2019, as well as elaborate on the future trading partnership between the EU and the UK.
She is expected to say: “While the UK’s departure from the EU is inevitably a difficult process, it is in all of our interests for our negotiations to succeed… so I believe we share a profound sense of responsibility to make this change work smoothly and sensibly, not just for people today but for the next generation who will inherit the world we leave them.
“The eyes of the world are on us but if we can be imaginative and creative about the way we establish this new relationship ….. I believe we can be optimistic about the future we can build for the United Kingdom and for the European Union.”
With the UK set to leave the EU in March 2019, the clock is ticking on securing a post-Brexit trade deal. If no agreement is reached, the UK would trade with the EU on World Trade Organisation terms – adding an average of 5% on all goods.
Specific sectors like food and agriculture would be hit by tariffs of 20% or more.
The EU has indicated it will take six months for member states to sign off any deal, meaning there is only a year left for negotiations.
May is expected to say that if the negotiations are completed successfully, then “when this chapter of our European history is written, it will be remembered not for the differences we faced, but for the vision we showed; not for the challenges we endured but for the creativity we used to overcome them; not for a relationship that ended but a new partnership that began.”
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No member of the EU’s negotiating team is due to attend the speech, despite the bloc’s chief negotiater Michel Barnier addressing Italian parliamentarians in Rome less than 24 hours before.
Giving an update on the negotiations, Barnier said: “I’m wondering why – beyond the progress we’ve made on certain points – there is still today major uncertainty on each of the key issues of the first phase.”
On the divorce bill, Barnier was clear that the UK should stump up the cash for projects it signed off as a full member: “We want to provide – and we must provide – certainty for project managers working in Europe, such as in Italy and its regions, and in other continents, such as Africa, on the basis of the commitment of the 28.”
Linking a future trade deal with the financial settlement, he added: “Beyond money, this is a question of trust between the 27 and the United Kingdom, based on the respect of one’s signature.
“And everyone knows that we will need this trust to create a solid relationship in the future.”
Negotiating teams from the UK and the EU will meet in Brussels on Monday to begin the next round of talks.
Barnier will then update EU leaders at summit on October 19-20 on whether sufficient progress has been made on citizens’ rights, the financial settlement and the Irish border, and if the talks can move on to the future trading relationship.