European Union officials have thrown down an early gauntlet in their pending talks over Britain's exit from the bloc, with a leaked document indicating they will not agree to a free trade deal until the two-year negotiation process has ended.
The nine-page paper, which has been circulating around U.K. and European media and has been seen by TheStreet, essentially sets out the bloc's broad negotiating stance as it braces for talks between London and Brussels and will be voted on by members of the European parliament next week in Strasbourg.
"This will be an unprecedented and regrettable event as a Member State has never left the European Union before," the paper reads, adding the exit "must be arranged in an orderly fashion so as not to negatively affect the European Union, its citizens and the process of European integration."
"The European Parliament represents all citizens of the European Union and will act throughout the whole process leading to the withdrawal of the United Kingdom to protect their interests," the paper said.
Among the positions the document puts forward is that Britain can't get a new free trade deal with the EU until exit talks are completed and that "the United Kingdom will continue to enjoy its rights as a Member State of the European Union until the withdrawal agreement comes into force and will therefore also remain bound by its duties and commitments arising therefrom."
The clause is seen as a reference to the notion of a so-called 'Brexit Bill' in which Britain would need to pay as much as €60 billion ($64.7 billion) to Brussels to satisfy existing and future financial commitments to the bloc. EU President Jean-Claude Juncker, while not putting a precise figure on the bill, has nonetheless said it will "reflect "former commitments by the British government and by the British parliament" but insisted there will be "no sanctions, no punishment, nothing of that kind."
The EU paper also suggests that if Britain were to negotiate a free-trade outside of the Union during the exit process, it will then cease talks on a similar deal with the bloc immediately. That could create a three-way debate between London, Brussels and Washington, given the latter's desire to put together a quick trade deal with the UK.