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It also states that during a transition period, “all existing Union regulatory, budgetary, supervisory, judiciary and enforcement instruments and structures will apply ” - although the UK will no longer be part of EU decision-making.
“The European Council will calibrate its approach as regards trade and economic co-operation to avoid upsetting existing relations with other third countries," the document adds.
Update: Belgian MEP Guy Verhofstadt, the European Parliament's representative in the Brexit negotiations, has tweeted: "Remarks by David Davis that Phase one deal last week not binding were unhelpful & undermines trust. EP text will now reflect this & insist agreement translated into legal text ASAP.
He added: "After David Davis' unacceptable remarks it’s time the UK government restores trust. These amendments will further toughen up our resolution."
His tweet includes pictures of amendments, signed by himself, Manfed Weber, Gabrielle Zimmer and others, noting that Davis' statement on Sunday is a "risk to undermine the good faith built up during the negotiations" and that talks can only progress if "the UK government also fully respects the commitments it made in the joint report and they are fully translated into the draft agreement".
The European Council will meet on Friday, where leaders of the EU-27 will formally grant sufficient progress before agreeing new negotiating guidelines that will begin the second phase of the Brexit talks, finally opening it up to trade and transition.
Yesterday, Theresa May told MPs she expected work on transition to begin "immediately", and hoped it would be agreed in the first quarter.
EU wants UK divorce deal made legally binding