EU Says No Trade Talks Until full Brexit

After Brexit, the UK would become a “third country” in EU terms, she said – meaning trade would be carried out based on World Trade Organisation rules until a new deal was complete.

“There are actually two negotiations. First you exit, and then you negotiate the new relationship, whatever that is,” she said.

The European Union’s top trade official says the UK cannot begin negotiating terms for doing business with the bloc until after it has left.

A recent trade deal with Canada took seven years to negotiate.

Ms Malmstrom, the EU Trade Commissioner, underlined that detailed talks to shape the UK’s new trading relationship with the EU should not start until after the process of leaving politically, under an Article 50 process lasting up to two years.

“The referendum – which of course we take note of and respect – has no legal effect. First there has to be notification, which the next prime minister will do, I hope swiftly. And then that process can start.”

There is concern in the City that having to do business for years under WTO rules could be disastrous for the UK’s service industries.

She said she was “saddened” that the UK – which has traditionally defended the principle of free trade – is leaving the EU.