The European Union has agreed to move Brexit talks with the UK onto a second phase focused on trade and a transition pact but called for "further clarity" from the UK about the future relationship it wants. <br/><br/>The first issue to be discussed, early next year, will be the details of an expected two-year transition period after the UK's exit in March 2019. Talks on trade and security co-operation are set to follow in March. <br/>'<br/>British Prime Minister Theresa May hailed an "important step" on the road but Germany's Angela Merkel said it would get "even tougher". President of the European Council, Donald Tusk, broke the news that the 27 EU leaders were happy to move on to phase two after they met in Brussels. <br/><br/>He congratulated Mrs May on reaching this stage and said the EU would begin internal preparations for the next phase right now as well as "exploratory contacts with the UK to get more clarity on their vision". While securing a deal in time for the UK's exit in March 2019 was realistic, he suggested that the next phase would be "more challenging and more demanding".<br/>'<br/>The EU has published its guidelines for phase two of the negotiations, with discussions on future economic co-operation not likely to begin until March. The three-page document says the UK will remain under the jurisdiction of the European Court of Justice and be required to permit freedom of movement during any transition period. <br/><br/>And agreements on the Irish border, the so-called divorce bill and the rights of EU and UK citizens, agreed by Mrs May last Friday, must be "respected in full and translated faithfully into legal terms as quickly as possible".