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British PM now faces biggest test: a Brexit trade deal to keep everyone happy

[March 23, 2018] By Elizabeth Piper

LONDON (Reuters) - For Theresa May, the hardest stage of Brexit talks may be just beginning.

The British prime minister has secured the agreement of the rest of the European Union for a transition deal that gives companies and citizens 21 months to prepare for Britain leaving the bloc a year from now.

Her British critics had said she would never manage to bridge deep differences with Brussels and win the deal, which opens the way for talks on Britain's future ties with the EU.

But she now faces her toughest test yet -- negotiating an overall Brexit agreement that is acceptable to her bitterly divided Conservative Party and nation as well as Brussels.

After giving away some bargaining chips that several members of her Conservative Party and Brexit campaigners say could have been used to ensure the deep trade deal the prime minister says she wants, May will be under pressure not to make any more concessions, especially over Northern Ireland or fishing.

And Brexit-supporting members of her party, and even some of those who voted to stay in the EU at a 2016 referendum, are determined that if EU leaders ask for Britain to give away any more, May must walk away from a bad deal.

"We have the chance, now, to create a new dynamic in the talks to work together to explore workable solutions -- in Northern Ireland, in our future security cooperation, and in order to ensure the future prosperity of all our people," May told leaders late on Thursday.

"This is an opportunity it is our duty to take and to enter into with energy and ambition," she added, according to a senior British official.

May has long been keen to move on to what is for Britain the most important part of the Brexit negotiations on the future relationship, when she wants to secure the deepest ever free trade agreement to help justify a standstill transition.

Having weathered criticism for agreeing to hand over 35-39 billion pounds, accepting 21 months of almost no change, and a backstop agreement that could see the British province of Northern Ireland staying in the EU's customs union, May must now try to strike a deal that wins over Brexit supporters.

"I am willing to accept 21 months of mild discomfort during transition as long as we can achieve the prize of real Brexit, taking back control of our money, borders and laws," Brexit campaigner and Conservative lawmaker Andrew Bridgen told Reuters.

"And whatever free trade deal we negotiate with the EU has to be worth more than 40 billion. Canada got one for nothing."

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Britain's Prime Minister Theresa May and Slovenia's Prime Minister Miro Cerar attend a European Union leaders summit in Brussels, Belgium, March 23, 2018. Olivier Hoslet/Pool via Reuters

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Since having to lower what her officials say were unreasonably high expectations among some Brexit supporters for the transition deal, or in her words an implementation period, May is trying to manage hopes for the final deal.

At a speech at London's Mansion House earlier this month, May used the language of compromise to suggest that not everyone would get what they wanted in the negotiation.

May suggested a customs partnership or a streamlined arrangement, with jointly implemented measures and the use of technology such as "trusted traders schemes" and "the most advanced IT solutions" to minimize friction.

That would, a British government source said, help ease what could be the most difficult hurdle to clear for British negotiators: how to make sure there is no return to a hard border between Northern Ireland and EU member Ireland.

A return to checkpoints could disrupt a peace agreement that has seen the border melt away and reduced sectarian conflict in the North. Both London and Brussels say there should be no return to a hard border.

"It can be solved with the use of technology and goodwill and political acumen," the source said.

"We will not be introducing infrastructure on the border."

Britain has published a schedule of meetings on the Northern Ireland/Ireland issues until late next month and hopes to make progress on dealing with border solutions.

But the ideas have yet to gain traction in Brussels, where EU officials have repeatedly asked for more details - something that has annoyed the British negotiating team, which feels its hands have been tied by the scheduling of the talks.

It has also meant that the wording in the transition agreement signed off by EU leaders on Friday has yet to be approved while negotiators resume work to find an 'operational' compromise on the Northern Irish backstop.

That has made some in London nervous.

"We can't sign up to anything until it's complete in every detail, and one of those details has got to be a proper form of words that doesn't amount to a surrender of the territory of Northern Ireland to the European Union," David Jones, a former Brexit minister and Conservative lawmaker, told Reuters.

(Reporting by Elizabeth Piper; Editing by Hugh Lawson)

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