The Brexit negotiations moved to round two (trade talks) last week when UK Prime minister Theresa May agreed to a divorce bill that satisfied the EU requirement of "sufficient progress".

In the trade talks, David Davis, the UK's chief Brexit negotiator seeks a Canada Plus Plus Plus agreement with the EU, while warning of the consequences if trade talks break down.

"Canada plus plus plus" is a reference to a trade deal between Canada and the EU.

"We'll probably start with the best of Canada, and the best of Japan and the best of South Korea and then add to that the bits that are missing, which are the services," said Davis.

Unlike the Canada deal, Davis also wants financial services included in the tariff-free area.


The Carrot

The odds of the UK exiting without a deal had "dropped dramatically" according to Davis. Yet Davis cautioned that the deal struck by Theresa May on Friday to move to the next phase of talks was a "statement of intent" and not "legally enforceable".

If a trade deal cannot be worked out, the UK is willing to walk away. "No deal means we won't be paying the money." The divorce bill, is between £35 billion and £39 billion. That' s approximately $47-$52 billion, or €40- €44 billion.

Four Outcomes

Mike "Mish" Shedlock

No Deal Brexit Odds Rise: UK Thoroughly Rebuked at EU Conference in Salzburg

UK Prime Minister Theresa May presented her "Chequers" Brexit Plan at an EU Summit. She was thoroughly rebuked.

Non-Meaningful: UK's Surprisingly Close Vote to Reject No-Deal Brexit

I expected a vote to prohibit a no-deal Brexit would win by a landslide. It didn't, and no-deal is still the default.

EU Shocked to Discover UK May Walk Away With No Deal

The EU now faces the shocking discovery that the UK is not Greece, the EU does not hold all the cards, and the UK is able and willing to simply walk away from ever-escalating EU demands.

Brexit Legalities and Plans for No Deal

Plans are underway for no-deal by the EU and finally the UK. The former claims to be prepared.

Brexit Talks Paused Until Wednesday: Best Deal is No Deal

Brexit Talks Paused. May needs to show a willingness to say to hell with it all.

Boris Johnson Takes "No Deal" Fight to UK Supreme Court

Boris Johnson has taken the Benn Bill legislation blocking No Deal to the UK supreme court.

EU Holds Emergency Meeting to Prepare for No-Deal Hard Brexit

After the EU rebuked Theresa May's Chequers proposal, the chance of a hard Brexit rose sharply. The EU is now preparing.

Amazon Receives 238 Proposals from 43 States Plus Mexico and Canada for Second Headquarters

For all the bashing of Amazon for its alleged stealing of business of mom and pop stores, the company received 238 proposals from 43 states, plus 3 Mexican states and 6 provinces in Canada for a second headquarters. Amazon's top demand is a tax break. Everyone is happy to oblige.

UK Debates the Meaning of "Temporary" as Legal Review Reveals Permanent Trap

As expected, a review of the Brexit doc that May signed shows the distinct possibility the UK could be trapped forever.