“Go first, then negotiate,” Malmström said.

He said that after Brexit, the UK would become a “third country” in EU terminology, meaning trade would be governed by World Trade Organization (WTO) rules until the new agreement was finalized.

Meanwhile, the EU’s newly concluded trade deal with Canada has been seven years in the making. It now has to be ratified by all EU countries, so it will come into force in a year or two. As UK companies comply with European rules, the process will be “slightly quicker” in the UK’s case than in Canada, the UK server wrote.

Agreements within the WTO limit foreign trade barriers, otherwise countries would have to apply the same tariffs to each other as they do to other countries, the BBC writes.

EU Trade Commissioner Malmström stressed that detailed talks on EU-UK trade relations cannot begin until the political Brexit process under Article 50, which could take up to two years, is completed.

“In fact, these are two negotiations. Leave first, then negotiate a new relationship,” he said. “The referendum – which of course we respect – has no legal effect. First there has to be an announcement, which I hope will be made soon by the next prime minister, and then the process can begin,” he added.

There are concerns in London’s financial district that years of operating under WTO rules could have a negative impact on the services sector. Media speculation is that many foreign banks will move from London to Frankfurt, for example.

Under EU law, the bloc cannot negotiate separate trade deals with any of its members – which is why European commissioners insist those countries must leave the EU first.

At the same time, the EU does not allow its members to negotiate their own trading terms with countries outside the EU, so these negotiations can only begin after Brexit.

“These rules pose a serious challenge to any prime minister trying to deliver Brexit,” the BBC added.