BRUSSELS, Jan 18 (Reuters) - The European Union's 27 states are preparing to launch negotiations with Britain on the post-Brexit transition period, and are starting to map out the bloc's future relationship with the first ever country to leave.
Below are the key elements of the latest EU thinking based on conversations with diplomats and on draft instructions, seen by Reuters, which the 27 governments will give to their Brexit negotiator Michel Barnier.
* On Britain's withdrawal agreement, which the EU hopes to seal by October, intellectual property rights, customs arrangements and personal data protection are among the issues that still need resolving.
* Britain will leave the EU on March 29th, 2019 and there will be a transition period after that until the end of 2020.
Agreeing a new deal between Britain and the EU is likely to take longer than that and the EU can agree in the future to a time-limited extension of the transition period, if necessary.
If there were to be an extension, the EU wants Britain to stay bound by all EU laws, including the oversight of the bloc's top court, the European Court of Justice.
That means the hyper-sensitive battles over the ECJ will return to haunt both sides' negotiators.
* During the transition period, Britain is to remain an EU member in everything but name but would have no representation in EU decision-making bodies. Britain would remain part of the EU's customs union and internal market.
* The EU wants its citizens who arrive in Britain until the end of the transition period to get full rights in Britain, including life-time residence and other benefits, just like those who arrived to stay before Brexit day.
* All changes to EU laws during the transition period would have to automatically apply to and in Britain. The primacy of EU law over British law would be preserved.
* Britain can negotiate new trade deals after it leaves the EU, but they cannot enter into force until the end of the transition period, unless the bloc agrees.
* The EU wants to consult with Britain on fishing quotas during the transition period and wants the agreement on transition to cover Euratom.
* The EU 27 have called on Britain to explain in more detail how close it envisages its ties with the bloc will be from 2021, and expect a speech by UK Prime Minister Theresa May on that in the coming weeks.
* Any new deal with Britain from 2021 must be based on "a balance of rights and obligations", meaning that the closer ties London wants to have with the EU, the more it would be subject to EU laws and courts.
* The EU currently has the closest ties with non-EU member Norway, which has full access to the EU's single market, followed by Switzerland, which has extensive access to it. Then come association deals, such as the one with Ukraine, specific cases like Turkey, which is part of the EU's customs union, and pure trade agreements, like the one with Canada.
* The court of the European Free Trade Association (EFTA) has been mentioned as a possible model for dispute resolution for the EU and Britain after Brexit.
The Canada deal envisages no role for EU courts, while the Ukraine one sets up an arbitration panel that is obliged to ask EU courts for interpretation and is then bound by what they say.
(Reporting by Gabriela Baczynska; Editing by Jon Boyle)