Brexit: Tensions emerge over UK-EU trade negotiations

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"First you exit then you negotiate": Cecilia Malmstrom

UK and EU politicians have given very different accounts of how the UK's Brexit negotiations should proceed.

The EU's Trade Commissioner, Cecilia Malmstrom, says the UK cannot begin negotiating trade terms with the bloc until after it has left.

"First you exit then you negotiate," she told BBC Newsnight.

But the BBC understands other EU Commission officials privately believe it is "inconceivable" that trade talks would not start before the UK's exit.

One of the candidates to be next UK prime minister, Liam Fox, called Ms Malmstrom's stance "bizarre and stupid", saying the Brexit talks would include trade.

But the BBC's Chris Morris in Brussels says Ms Malmstrom's view of two consecutive sets of negotiations appears technically correct.

'Divorce' proceedings

At the EU summit this week the 27 government leaders - without the UK - agreed Brexit "divorce" talks should begin and end before any talks on a new settlement for the UK, Chris Morris says.

Brussels sources told our correspondent there was a real determination among the leaders not to mix the two.

The statement from the 27 said they wanted the UK to be "a close partner of the EU". But they also spoke of an agreement to be "concluded with the UK as a third country".

The phrase "third country" means the UK post-Brexit.

Outside the EU, the UK would trade with the bloc under World Trade Organization rules, pending a possible new deal on free trade.

WTO conditions would mean trade tariffs and non-tariff barriers, as the UK would no longer be in the EU single market.

When do Brexit talks start?

Not until a new Conservative leader is elected, who will replace David Cameron as prime minister by October.

Then it will be up to the new leader to decide when to trigger the EU's Article 50, the procedure for withdrawing from the EU.

Article 50 sets a two-year deadline for withdrawal from the EU. But the detailed negotiations on the UK's future relations with the EU could last years longer.

What sort of deal does the UK want?

Much depends on who wins the Conservative leadership. There are also divisions in the Leave camp over which of the UK's current EU arrangements should be kept.

Immigration was such a key issue in the referendum there is likely to be hard bargaining over free movement of EU workers.

But EU leaders have said access to the single market requires the free movement of people.

Achieving continued preferential access to the EU single market of 500m consumers would be a big prize for the UK. But there are also voices in the Leave camp urging a UK focus on trade with other partners.

Who will negotiate with the UK?

Once the UK has given notification under Article 50, the European Council - that is, the other 27 governments and council president - will adopt guidelines for the negotiations.

It is not yet clear how the EU will organise its negotiating team, but the European Commission will take charge of the details.

The final deals on UK withdrawal and a future UK-EU relationship will have to be agreed by the EU's top institutions - the European Council, Commission and European Parliament.