The Brexit Ink Is Barely Dry And the Two Sides Already Disagree

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The Brexit deal is only hours old, but disagreements between U.K. and European Union officials over what it means have already begun.

Buried among the hundreds of pages published on Wednesday, there’s reference to the two sides pursuing “comprehensive arrangements” in their future relationship, “building on the single customs territory” set out in the draft divorce treaty.

To many in Brussels, that’s quite a clear indication that the EU thinks the U.K. will remain in a customs union, beyond the temporary measures they’ve agreed to as a fix for the Irish border.

But there are different interpretations of what “building on” means, diplomats said. To the EU it means the temporary customs arrangement is the first step to something permanent.

“That is their negotiating position, not our negotiating position,” a U.K. official said shortly after the agreement was published. To the Brits, the term merely means it’s the start of a new set of talks.

It demonstrates the difficult path that still lies ahead, particularly as permanent membership of the EU’s customs union is a red line for many in May’s Conservative government. Detailed trade talks about what the final relationship between the two will look like won’t get going until Britain has left the bloc. A transition period will bridge the gap until then.

The EU thinks the U.K. will have to remain in a customs union and negotiations over the future relationship will proceed on that basis, a European official said.

If nothing else, it might mean “more creative thinking” in the years to come, according to the official.

©2018 Bloomberg L.P.