Brexit reaches 'decisive moment' as the EU turns its attention to the future relationship

  • The so-called political declaration is due to be published Tuesday and then reviewed by the different EU capitals before Thursday.
  • The 27 European leaders and U.K. Prime Minister Theresa May are then due to sign off this political deal on Sunday, when they meet in Brussels.

In Brussels, Brexit talks have shifted toward one clear direction: the future relationship.

Ministers for European affairs met on Monday morning to discuss the political text that will serve as a guideline to the talks that will begin after the U.K. leaves the EU in March — these negotiations will be mainly targeted at securing new trade arrangements between both sides.

The so-called political declaration is due to be published Tuesday and then reviewed by the different EU capitals before Thursday. The 27 European leaders and U.K. Prime Minister Theresa May are then due to sign off this political deal on Sunday, when they meet in Brussels.

"We are at a decisive moment in this process, no one should lose sight of the progress that's been achieved in Brussels and in London," Michel Barnier, the EU's chief Brexit negotiator, told reporters in Brussels on Monday.

"This is now our focus: the (political) declaration will open the door to a negotiation on an ambitious economic and strategic partnership in the future, once the U.K. has left," Barnier said, making it clear that the transition period — which is currently causing a political storm in Westminster — is not the same as the future relationship.

The transition period refers to the time after March 29, when the U.K. leaves the EU, and is set to last at least until 2020. During that time, the U.K. and the EU will negotiate the second phase of the Brexit process, which includes their future trade links.

The draft exit agreement, published last Wednesday, showed that if the talks on new trade arrangements drag on, both sides are willing to extend the transition period — to allow negotiating teams to come up with a deal.

Michel Barnier, who is reportedly in favor of extending the transition period until 2022, told reporters that "any prolongation … can't be indefinite."

Extending the transition period is another controversial issue for May back in the U.K. This is because during that time, the U.K. would have to keep making financial contributions to the EU — something that those supporting Brexit are particularly against.

Barnier told reporters that at this stage "it is premature" to say how much those payments would be every year.

Back Prime Minister May

Speaking in Brussels, Alan Duncan, the U.K.'s minister for Europe and the Americas, told reporters that May has made it clear that the withdrawal agreement is ready and U.K. lawmakers should support her 100 percent.

"Back the Prime Minister 100 percent, be realistic, and accept (that) what we need here is a deal that will last in the future and telling the prime minister what to do at all the time is not going to make anything better," he said.

The exit agreement, which establishes how the U.K. will leave the EU in March, is set to be signed off by European leaders on Sunday. However, it will then have to be ratified in the U.K. and European parliaments. At this stage, the clear divisions among U.K. lawmakers when it comes to Brexit make it hard to predict whether the deal will actually get a green light in London.

Ales Chmelar, the secretary of state for European affairs for the Czech Republic, told CNBC Monday that he hopes the exit agreement will not be reopened.

The other 27 EU nations believe there is no time to negotiate another deal before the U.K.'s departure in March.

Failure to approve the exit agreement would put the U.K. one step closer to leaving the EU without a deal — bringing huge uncertainty to businesses and citizens on both sides of the English Channel.