(Bloomberg) -- The European Union will challenge Theresa May on Wednesday when it publishes a draft Brexit treaty that ignores some of the U.K. prime minister's most important demands.
The bloc is planning to set out in legal detail how it expects the U.K. to depart in just over one year's time, and the terms of a transition period that will follow, according a person familiar with the matter. A German official added that the 27 members oppose an extension of the transitional period.
Talks on the transitional phase that businesses want to help smooth the U.K.'s withdrawal are continuing but the EU's 100-page draft agreement is likely to exclude May's proposals for how that phase should work, the person said.
The document is also likely to leave out a key compromise May is seeking in the section on the U.K.'s future land border with Ireland, the person said.
A senior U.K. government official warned that the EU's drafts must accurately reflect the positions of both sides and suggested the bloc is using the document to try to push its own agenda instead of producing a balanced text.
Delicate Juncture
The clash comes in a critical week for the Brexit process. In a key speech on Friday, May is due to announce her vision for the U.K.'s future trade partnership with the bloc in the hope of influencing the EU's own vision before it is fleshed out at a summit in three weeks' time.
Her rival in the meantime, Labour leader Jeremy Corbyn, has put forward his own version of Brexit that was looked upon more favorably by Brussels than May's own plan. Given her precarious situation, with only the thinnest of working majorities in Parliament, May can ill-afford a false move.
Even before she weighs in, negotiations between the U.K. and the EU need to reach an agreement on the transitional period that is due to come into force after March 29, 2019 -- exactly two years after May set the wheels in motion.
The talks have been tense so far, with disagreement over the rights of EU citizens moving to Britain during the period. That is a fight the U.K. now realizes it might lose.
In one crucial area -- what happens to the Irish border with the U.K. -- Wednesday's text will focus on May's worst-case scenario in which no trade deal can successfully maintain an open crossing.
Details Please
EU diplomats say this is because she's failed so far to give any detail on how she proposes to ensure there is no hard border infrastructure of customs checks at the frontier between Northern Ireland and the Republic of Ireland.
The text on Wednesday will instead focus on the “fall-back” position in which the U.K. agrees to align its trading rules with those of the EU to avoid the need for a separate customs regime at the border with Ireland.
This document will be “a draft withdrawal agreement from the EU's perspective which will then be a document to be negotiated over time,” Simon Coveney, Ireland's deputy premier, said on Monday.
One official said the document would include in detail all the three questions relating to the U.K.'s separation from the bloc, including the almost 40 billion pounds ($56 billion) it's promised to pay. It will also cover other issues that weren't agreed in the first phase of talks that ended in December, the official said.
The document is just a draft at this stage and the EU expects it to be revised. Both sides want it to be ready to sign by October, or the end of the year at the latest.
To contact the reporters on this story: Ian Wishart in Brussels at iwishart@bloomberg.net, Tim Ross in London at tross54@bloomberg.net, Birgit Jennen in Berlin at bjennen1@bloomberg.net.
To contact the editors responsible for this story: Flavia Krause-Jackson at fjackson@bloomberg.net, Emma Ross-Thomas
©2018 Bloomberg L.P.
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