The Prime Minister has confirmed that Britain's final signed trade deal with the EU will have to take place after the two-year Article 50 process and that the UK will become a "third country".

The third party status was detailed in the EU Council negotiation guidelines last Friday, and Theresa May said both sides were being "sensible" and "pragmatic" on the timing of discussions.

In an interview with Sky News during a trip to Jordan, when asked to clarify if she accepted "third country status" for the final deal, she said: "There's obviously a legal situation in terms of how the EU can conduct trade negotiations.

Image: Theresa May spoke to Sky News while on a visit to Jordan

"I'm clear that by the point at which we leave the EU, it's right that everyone will know what the future arrangement, relationship, partnership between us and EU will be. That's the sensible thing, it's a pragmatic way to look at it."

It is that outline of a future arrangement which will be done in two years, not a signed deal.


It raises the possibility that a deal will not have been signed before the next General Election.

The confirmation also piles on the pressure of negotiating a possible transition deal, referred to by Mrs May as an "implementation phase".

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This is important because it confirms UK acceptance of the final deal being negotiated under Article 218 of the EU Treaty, which means the entire EU27, including Spain and the regional Belgian parliaments such as Wallonia, will have a veto on the final deal.

Mrs May also denied that she had failed to achieve the parallel negotiations asked for in the Article 50 letter.

She clarified that her interpretation of parallel negotiations would be judged after the event, saying: "At the end of this negotiation, will we have looked at both withdrawal and the future relationship? That's what's important. That's what I'm asking for and that's what I believe increasingly we will see.

"You will see from the EU, various people have commented that they think we should get on to talking about the future relationship soon - and we will do that."

Labour's shadow Brexit minister Paul Blomfield accused Mrs May of "trying to downplay expectations" and said the Government must spell out a transitional deal to "stop the economy falling off a cliff edge".

He said: "It is less than a week since the Prime Minister triggered Article 50, and it seems every day brings another broken promise from the Government. First they said immigration may go up after Brexit. Now they are backpedalling on trade deals.

"We will hold the Government to account on the pledges made to the British people during the referendum campaign and since. They promised a comprehensive free trade agreement with the EU giving the 'exact same benefits' we have now. They said it would be ready for the day we leave, along with new trade deals with other countries."

Image: European Council President Donald Tusk has said the EU won't seek a 'punitive' Brexit deal

Mrs May also played down the prospect of "no deal" played up in her Lancaster House speech.

When asked why she would not publish an economic impact study of the consequences of "no deal", she said: "I don't think that would be in anybody's interests.

"We will be working to get the best possible deal in the British interest; I believe that deal will be good for the EU too - both sides will be working to make sure we have a good, positive, deep and special relationship going into the future."

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When asked to admit that her judgement on the path for Brexit was now "on her", she said that the EU had made clear that membership of the single market "effectively means membership of the EU".

But "this doesn't mean it can't be a really good trade relationship that will enable firms to have free access to the single market", she said.

Speaking in Jordan, with which the UK currently enjoys a free trade deal, through the European Union, Mrs May also said it was a priority to "continue" such deals, for example with Korea.

She said: "No, it will be possible to continue trade arrangements with countries that we have previously had them with through the EU when we are outside."

However, the EU Council document released last week seemed to rule that out.