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May's cabinet won't agree Brexit plan this week, official says

London - Prime Minister Theresa May is unlikely to provide the kind of clarity on her government’s Brexit blueprint that the European Union wants by the end of this week, according to a senior UK official.

In a sign of the growing complexity of the negotiation, the official said the March deadline for agreeing the terms of a transition phase now looks optimistic, while Britain’s final proposal for its future customs relationship with the bloc isn’t close to being ready.

May’s inner circle of top ministers - nicknamed the “Brexit war cabinet” - are holding two two-hour meetings on Wednesday and Thursday, with the aim of agreeing the UK’s goals for the trading relationship it hopes to negotiate with the EU. 

The committee is split between those including Chancellor of the Exchequer Philip Hammond who want to stay close to the bloc, and Foreign Secretary Boris Johnson, who wants to break free from EU rules.

The European Commission says it’s expecting an update from the UK on its intentions on Friday, although EU negotiator Michel Barnier gave a bit more leeway on Monday when he said he expects "an official UK position of the government in the next few weeks.” Talks on the outline future trading relationship are due to start in March.

Despite the imminent deadline, the British ministers almost certainly won’t reach an agreement on all the elements of the future relationship with the bloc at this week’s meetings, the official said.

Further talks are being lined up for next week and could even continue into the following week if necessary, said the person, speaking on condition of anonymity because the discussions are confidential.

Time is running out for May, who needs to set out her plan for Britain’s future ties to the EU before European leaders sign off on their own priorities at a summit in Brussels next month.

“May is under enormous pressure to provide clarity about the end-state,” said Mujtaba Rahman managing director at Eurasia Group . "The procrastination has allowed the EU to dictate the agenda.”

Customs debate

Even when May’s ministers do agree the broad outline for Britain’s post-Brexit ties to the EU, they won’t be close to finalising the kind of customs arrangement that the government wants to have with Europe, the official said. That’s because the two options under consideration - a customs “partnership” or a “streamlined customs arrangement” - require much more technical work before they can be properly assessed.

Before the UK and the EU sit down to discuss the future trade and security partnership, they need to agree the terms of a transitional phase, the grace period designed to smooth the introduction of new rules after Brexit day in March 2019.

Negotiations on the transition period began this week. Until recently, it seemed likely that the UK would simply accept the EU’s offer of a status quo deal, under which the current rules of its membership are simply extended.

But last week May signalled she planned to fight the EU over some of the conditions, and the UK raised objections on Tuesday to seven aspects of the European Commission’s position, according to another person familiar with the situation.

The government has repeatedly said it wants to pin down the transition arrangement by the end of the first quarter and is under growing pressure from business to do so. While the senior official said May’s team still hoped for a deal on the transition at the March summit of EU leaders, some think it’s growing less likely.

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