Trade talks between the UK and the EU bloc could stall for two years until Brexit is complete.
EU Not Ready For Trade Talks With Britain Until Full Brexit
Top EU Trade Commissioner Cecilia Malmstrom has asserted negotiations between the runaway United Kingdom and the European Union may not kick off until the exit process is compete as stipulated in Article 50 of the Lisbon Treaty.
According to Malmstrom, the process that could take up to 2 years to wrap, will be the only condition for formal negotiations on new trade agreements. The official says Brexit means that the UK will be categorized as a third country entity where trade will be subject to existing World Trade Organization rules until a new pact is reached.
Illegal to negoatiate trade with its own
Malmstrom further added that the UK was obliged to exit first and then negotiate. According to EU trade laws, it is illegal for the bloc to Agree to hold such talks with one of its own, which is why the commissioner remained adamant about a formal exit. It’s expected that the process would start after official notification by the incoming Prime Minister.
With the invocation of Article 50, there are fears that trading under WTO regulations could affect service industries negatively. Malmstrom was saddened by the fact that Britain, which has been vocal about free trade was about to exit the EU bloc.
Since it is forbidden by EU law for a member country to negotiate trade with outsiders, it is going to be a tough call for the next Prime Minister faced with the task to deliver Brexit.
WTO Rules to Apply
There is consensus that UK businesses will be safer with the single market option since they already comply with EU conventions and regulations. Even though the Norway single market concept remains feasible, there are hurdles to overcome given the long years it would take to negotiate and the reality that the UK could be trading under WTO longer than expected.