Leaving the European Union was meant to be the easy bit. But when the first draft text of the UK withdrawal agreement emerged on Wednesday, it has become clearer than ever that Brexit negotiations are in troubled waters.

The European commission’s draft legal text is partly based on a “gentleman’s agreement” struck between the UK and EU in December. But it contains a slew of provisions that contradict British hopes and policy goals.



The 118-page text falls into two parts: shaded grey paragraphs refer to areas where the EU and UK have yet to reach a preliminary agreement; white areas correspond to issues the two sides agreed upon in December. But as the furore over Ireland illustrates, the two sides disagree over what that deal really meant.

Unless these divisions can be overcome by October, British businesses could find themselves without a transition deal to cushion their adjustment to life after Brexit. Hopes of agreeing the transition at an EU summit on 23-23 March are already fading fast, and the EU’s chief negotiator, Michel Barnier, has repeated his warning that “the transition is not a given”.



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Five areas of disagreement that need to be resolved by the autumn.



The Irish border



In seven pages of dense legal text, European commission lawyers have blown apart the ambiguity over Northern Ireland’s status. The draft treaty says that in the absence of mutually agreed alternatives, Northern Ireland would remain part of the EU customs union, subject to many EU rules on goods. This means no internal borders and free movement of goods between Northern Ireland and the Republic of Ireland. Northern Ireland would be bound by EU rules on agriculture, environment, customs, competition policy and the electricity markets, subject to writ of the European court of justice (ECJ).

The British government argues that the Irish border provisions do not fully reflect what the EU and UK agreed in December. That December agreement included a statement guaranteeing “no new regulatory barriers” between Northern Ireland and the rest of the UK. This is missing from the EU legal text, because the EU thinks this is a British problem and not its job to fix.

European court of justice



Another incendiary issue is the role of the EU’s highest court. The EU wants the European court of justice to be the ultimate arbiter of any disagreements with the UK. The commission has proposed setting up a joint committee to settle disputes, but any deadlocked cases could be referred to the ECJ.

This is anathema to the British government, which has pledged to be free of the court’s jurisdiction, although Theresa May has conceded that the court will play a role in upholding the Brexit deal on citizens’ rights.

“Vassal state” clauses



The British government wants the right to have a say over any new EU laws that would adversely affect the UK, so as to avoid charges of hardline Eurosceptics, such as Jacob Rees-Mogg, who argue that the country would be no more than a “vassal state”. The EU says such an arrangement is impossible, as not even a member state can vet EU laws. The EU’s proposal to suspend swaths of UK single market access if the UK breaks the rules during the transition is also a matter of dispute.

Citizens’ rights



The EU and UK agree that they have done enough to protect the rights of some 4.5 million citizens, despite unhappiness in some quarters that the December deal does not go far enough. But a dispute remains over the rights of EU nationals who arrive in the UK during the mooted 21-month transition period. The British government does not want these people to have the automatic right to settle in the UK with the same rights as those who arrived earlier.

However, while the government sticks to this line, on Wednesday it made a big concession with an announcement that these citizens would be eligible to apply for the right to “apply for indefinite leave to remain”. Under cover of disagreeing with the EU, this is a climbdown by the government.

A lot of unfinished business

Judicial and administrative procedures, Euratom, data protection, public procurement, the status of goods on the market on Brexit day – these issues do not make the headlines but all have to be resolved if the UK is to agree a Brexit deal that includes a crucial transition.

The ECJ’s writ is a red thread running through much of this unfinished business, meaning that even deeply technical subjects out of the limelight could be difficult to resolve.