Britain says will be "positive and constructive" in Brexit talks

A year after Britons shocked the continent by voting on June 23 to cut loose from their main export market, new debate within Prime Minister Theresa May's cabinet on precisely what kind of trading relationship to pursue has perplexed European Union leaders, who warn time is tight to agree terms before Britain leaves in 2019.

"Today we agreed on dates, we agreed on organisation and we agreed on priorities for negotiations", he said after the talks at the European Commission in Brussels.

Davis said Prime Minister May will also set out at an EU summit on Thursday her proposals for the rights of the three million EU nationals living in Britain, and one million Britons in the EU, with the British government to publish a detailed offer next Monday. "We must first tackle the uncertainties caused by Brexit, first for citizens but also for the beneficiaries of European Union policies and for the impact on borders, in particular Ireland".

But while Britain may be exercising its sovereign right to leave, Barnier said, "The United Kingdom will no longer enjoy the same rights and advantages as European Union members".

It comes as Philip Hammond warned failing to secure a Brexit deal would be "very, very bad" for the country and insisted there must be transitional arrangements to avoid a "cliff edge". The EU side has been suggesting it will be looking for a settlement of around £50 billion in respect of the UK's outstanding liabilities.

"The best way we can spend this week is to rebuild trust", rather than tackle the big hard issues right at the start, another European source said.

The two year window for full agreement then ratification of a Brexit deal was launched in March by Prime Minister Theresa May - but then faced further delay after she called a snap General Election leading to the loss of the Tory majority in the Westminster Parliament.

"We have laid a solid foundation for future discussions", said Davis.

While the United Kingdom has said repeatedly that it wants out of the EU's single market and customs union - which offers tariff-free access to the EU, but requires countries to cede power to make their own trade deals - the DUP's manifesto says it wants a customs agreement and "arrangements to facilitate ease of movement of people, goods and services".

To kick the Brexit negotiations off, David Davis and Michel Barnier exchanged mountain-themed gifts, of a hiking book and walking stick.

If Britain crashes out of the European Union without a deal, that would create huge uncertainties for citizens and businesses as well as issues like global security. "We must think about the deep and meaningful partnership with Europe", he said.

Macron, a committed pro-EU leader and ally of German Chancellor Angela Merkel, easily won French legislative elections on Sunday, cementing his power base.

Britain already appears to have capitulated to the EU's insistence that talks first focus on three key divorce issues, before moving onto the future EU-UK relationship and a possible trade deal.

Linney Group chief executive Miles Linney said the main effect on his business would be from the "point of view of the supply chain" and that he fears for the effects of the election result on the negotiations.

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