There seems to be a lot of confusion in the newspapers around the negotiations to withdraw from the EU. Article 50 is the trigger for withdrawal but it does not cover future trading arrangements at all.
The EU trade commissioner has said (HERE) trade negotiations cannot start until the UK has left the EU because it is illegal for the EU to negotiate a trade deal with its own members. We have to become a third party country. I don't see this confirmed yet but no doubt plenty of banks and companies are looking at it. If we leave with no trade agreement in place and operate under WTO rules the cost will be enormous.
However, many commentators have said we can conduct withdrawal and trade talks simultaneously but this may not be in our interests anyway. All 27 countries have a veto on trade talks but only a qualified majority (65% population or about 20 countries) is required for withdrawal. So, combining them into one agreement gives several national parliaments the right of veto. Some countries even need referendums so the outcome would be totally unpredictable. The options are:
- Withdrawal talks followed later by trade talks (probably ten years I would think)
- Withdrawal and trade talks combined
- Withdrawal and trade talks separate but simultaneous
The first is the longest and most certain of success but very damaging to the economy. The last two may seem quicker and would be less damaging economically but the outcome is less certain because the talks are more complex and all 27 other countries have a veto. We'll have to wait and see.
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