19 June 2017

UK begins Brexit negotiations, as Hammond says UK will leave the single market and customs union

Brexit Secretary David Davis heads to Brussels this morning to begin Brexit negotiations. In a statement he said, “There should be no doubt — we are leaving the European Union, and delivering on that historic referendum result.” He added, “We are not turning our backs on Europe,” and, “it’s vital that the deal we strike allows both the UK and the EU to thrive…We will soon introduce bills for new immigration and customs arrangements and the Great Repeal Bill will transpose all EU law into UK law, providing certainty for businesses. These talks will be difficult at points, but we will be approaching them in a constructive way.”

According to The Times, Prime Minister Theresa May will travel to Brussels on Thursday to make a bold offer to guarantee the rights of EU migrants in Britain in exchange for safeguards on British citizens living elsewhere in the EU. The Times also reports that the UK will drop its opposition to the EU’s sequencing approach to the negotiations.

Elsewhere, speaking on the BBC’s Andrew Marr Show, Chancellor Philip Hammond said, “We’re leaving the EU and because we’re leaving the EU we will be leaving the single market.” He added, “We will leave the customs union when we leave the EU. That’s a statement of legal fact. The question is what we put in place and what we put in place may not be a single arrangement that endures forever, it may be an arrangement which lasts for a couple of years as a temporary measure before we get to the long term agreed status quo for relations between the UK and the EU. This is all a subject of negotiation.” On a no deal scenario, Hammond said, “No deal would be a very, very bad outcome for Britain. But there is a possible worse outcome and that is a deal that is deliberately structured to punish us and I would not agree to [such] a deal.” Writing for Conservative Home Open Europe’s Henry Newman says a “commitment to leaving the Customs Union was the only logical step for the UK. Otherwise, the UK would be unable to shape its own trade policy, and would miss out on many of the potential benefits of Brexit.”

Meanwhile, Andrea Leadsom, leader of the House of Commons, announced that Parliament would hold a two year session in order to “build the broadest possible consensus for our Brexit.” Leadsom also told BBC’s Sunday Politics that it is “perfectly possible” for the Brexit negotiations to be completed within the two-year time frame stipulated in Article 50. Discussing today’s negotiations on BBC Radio Scotland, Open Europe’s Pieter Cleppe commented that, “Time is limited but it’s still possible to agree the exit terms of the UK’s departure, how a long term framework will look like, as well as a transitional arrangement to allow time to negotiate that long term framework.”

Separately, the EU’s Economic and Financial Affairs Commissioner Pierre Moscovici has said Brexit will be “neither ‘hard’, nor ‘soft’, but amicable and firm.” German Foreign Minister Sigmar Gabriel has told Germany’s Welt am Sonntag newspaper, “Perhaps there is now a chance to achieve a so-called soft Brexit.” Gabriel said that Britain would have to allow free movement for Europeans to keep full access to the single market but offered “a joint court that is staffed by Europeans and Britons which in principle follows the decisions of the European Court of Justice.”

Source: The Times BBC Andrew Marr Show transcript: Hammond Reuters Conservative Home: Henry Newman Reuters 2 The Times

Liam Fox meets with US counterparts to lay groundwork for UK-US trade deal, as Boris Johnson calls for an “open” Brexit

Writing in the Daily Telegraph, Secretary of State for International Trade Dr Liam Fox announced that he will visit the US to in order to lay the groundwork for a potential UK-US free trade agreement as the UK leaves the EU. He writes, “While we cannot, under EU law, conclude any trade agreements before we actually leave, it is essential that we do a great deal of preparation over the coming months.” He continues, “We want Britain to be able to negotiate its own trade agreements, and as we leave the EU that is what we will do. We also want tariff-free trade with Europe and cross border trade there to be as frictionless as possible.” This comes following the appointment of the former New Zealand Vice Minister for International Trade and Foreign Affairs, and ambassador to the World Trade Organization, Crawford Falconer as the government’s chief trade negotiations adviser.

Separately, writing in The Sunday Times Foreign Secretary Boris Johnson stressed, “We are going to deliver not a soft Brexit or a hard Brexit — but an open Brexit, one that ensures that the UK is still turned outwards, and more engaged with the world than ever before. That means properly looking after the interests of the 3.2m EU citizens who live and work here — always assuming there are reciprocal protections for the 1m UK nationals in the rest of the EU.” He added, “You can take back control of borders without slamming the drawbridge on talent.  Our plan is to use these talks to create a huge zero-for-zero tariff-free trade deal with the EU.”

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Starmer: Remaining in the customs union should be an option

Speaking on the BBC’s Andrew Marr Show, Shadow Brexit Secretary Sir Keir Starmer argued that remaining in the customs union “should be left on the table as an option.”  He continued, “So far as the single market is concerned our [Labour’s] Manifesto’s clear. We want to retain the benefits of the single market and the customs union. Formal membership, full membership is only available to EU member states and that’s why there’s all the discussion about what sort of model that gets us to close to membership.” On freedom of movement Starmer said, “It’s clear that freedom of movement will end when we leave the EU and therefore the discussion we’re having is what model fits with changes to freedom of movement, plus the trade that we need.”

Separately, a YouGov poll commissioned by Global Britain has found that 64% of Labour voters would choose free trade over immigration controls compared to 19%.

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Macron’s party wins majority in legislative election amidst low turnout

French President Emmanuel Macron’s La République en Marche and its centrist ally Modem won 350 of the 577 seats in the National Assembly following the final round of the legislative election. Centre right Les Républicains won 137 seats, while the Socialist party experienced its worst results holding on to just 44 of their 284 seats. The far right Front National won 8 seats with leader Marine Le Pen winning a seat for the first time. Turnout was just 43% a record low. In a statement, French Prime Minister Edouard Philippe said, “Abstentionism is never good for democracy. The government will consider it has an obligation to succeed. Now comes the time for action.”

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Business lobby groups pen letter to government urging to “put the economy first” in Brexit talks

The CBI, British Chambers of Commerce, manufacturers’ group EEF, the Federation of Small Businesses and the Institute of Directors have written to Business Secretary Greg Clark urging the government to “put the economy first” in the Brexit negotiations. The letter argues a transitional deal should “maintain the economic benefits of the single market and the customs union until a final settlement between the United Kingdom and the European Union is agreed and implemented.”

Separately, according to a report by the National Institute of Economic and Social Research and the Chartered Institute of Personnel and Development (CIPD), Britain should ensure that employers retain access to both skilled and unskilled workers from the EU or there is a risk of damaging UK business. Gerwyn Davies, CIPD labour market adviser, said, “If the Government does not provide a user-friendly, flexible and affordable immigration system for EU nationals post Brexit… significant numbers of employers will be forced to relocate or focus future growth outside the UK.”

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Pressure mounts on Theresa May as reports of possible leadership challenge surface if there is a backslide on Brexit

The Daily Telegraph reports that Conservative MPs are prepared to mount a leadership challenge if Prime Minster Theresa May is caught “backsliding” on Brexit by attempting to keep the UK in the customs union and single market or allowing the European Court of Justice (ECJ) any leeway. Elsewhere, The Sunday Times quotes a former minister saying, “She’s [Theresa May] going to have to go sooner rather than later. The critical moment is June 28 and 29, when there are votes on the Queen’s speech. If it looks like they will be lost, you have to strike.”

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