23 July 2018

Brexit Secretary: Brexit divorce bill should be conditional on UK-EU trade deal

Brexit Secretary Dominic Raab told the Sunday Telegraph that the UK would seek to ensure its exit payment of £39 billion is conditional upon reaching a future trade agreement with the EU. He explained that the Article 50 mechanism requires both a withdrawal agreement as well as an outline of the future UK-EU relationship. Raab argued, “You can’t have one side fulfilling its side of the bargain and the other side not, or going slow, or failing to commit on its side. So I think we do need to make sure that there’s some conditionality between the two,” adding, “Certainly it needs to go into the arrangements we have at international level with our EU partners. We need to make it clear that the two are linked.”

Elsewhere, Raab told the BBC’s Andrew Marr programme yesterday, “If it’s reciprocated, the energy that we are going to bring to these negotiations, the ambition and the pragmatism, we [will] get a deal done in October.” Commenting on an EU document published last week which highlighted preparations for the UK leaving the EU without a deal, including the effect on citizens’ rights, Raab said, “I think that’s a rather irresponsible thing to be coming from the other side. We ought to reassure citizens on the continent and also here. There is obviously an attempt to try and ramp up the pressure.”

Separately, the Guardian reports that senior cabinet ministers are planning to tour EU27 capitals to promote the Government’s Brexit proposals during the summer. In a statement ahead of his visit to Berlin today, Foreign Secretary Jeremy Hunt said, “Our European partners must show much more flexibility and creativity in negotiations if we are to avoid a ’no deal by accident’ scenario.” Prime Minister Theresa May said on Saturday, “We must step up the pace of negotiations and get on to deliver a good deal that will bring greater prosperity and security to both British and European citizens. We know the clock is ticking – let’s get on with it.”

Meanwhile, Chairman of the Eurosceptic European Research Group (ERG) Jacob Rees-Mogg said the UK is likely to leave the EU on World Trade Organisation (WTO) terms, adding, “I think we should carry on negotiating until the end…But the truth is that WTO is likely to be all that [the EU] will offer us.”

Source: The Sunday Telegraph Press Association The Guardian The Guardian Bloomberg

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Michel Barnier raises questions about the UK’s Brexit White Paper

The EU’s chief Brexit negotiator Michel Barnier on Friday said that the UK Government’s White Paper for a future UK-EU partnership opened “the way to a constructive discussion,” adding however that the EU27 still have many questions about the plan. Barnier voiced concerns over the UK’s suggestion of aligning with EU goods regulations as this would only apply to goods checked at the border and not to other agri-food rules such as pesticides, adding, “How can we protect consumers in Europe?” He also questioned whether the UK’s proposal for a ‘facilitated customs arrangement’, under which the UK would collect EU tariffs on goods destined for the EU at its border, would create additional bureaucracy, and asked, “How can custom services verify the final destination of goods so that they apply the right tariff? Is there not a major risk of fraud?” Barnier also warned that progress in Brexit negotiations depends on finding agreement on a “legally operative backstop” for the Irish border issue, saying, “There will be a deal if there is an agreement on the backstop. It’s not necessarily our backstop. We can work on this, amend it, improve our backstop … But we need an operational backstop now, in the Withdrawal Agreement, and not later.”

Elsewhere, Irish Taoiseach Leo Varadkar said on Friday that it was the UK’s responsibility to find a solution for a ‘backstop’ to avoid a hard border on the island of Ireland, explaining, “We are very happy to talk about the wording of the backstop but the outcome must be the same… that there won’t be a hard border between North and South,” and adding, “We are open to discussions on a backstop that achieves what we want it to achieve. But it must be better or the same as we have proposed.”

Separately, Brexit Secretary Dominic Raab told the BBC’s Andrew Marr programme that it is “useful” for Barnier to ask questions about the White Paper, explaining, “This is an unprecedented situation, we’re coming out with innovative proposals, we need to work together. But actually the fact that Michel Barnier is not blowing it out of the water but asking questions is a good positive sign – that’s what we negotiate on.”

Meanwhile, according to the Guardian, EU27 diplomats argue that an extension of Article 50 to give more time for negotiations would require a major change in UK domestic politics which could be brought by a second referendum or a general election. A senior diplomat is quoted by the paper saying, “If it is time just for the sake of putting off an inevitable no deal, then it will not happen.”

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Financial Times: Barnier dismisses the UK’s post-Brexit financial services proposal

The EU’s chief Brexit negotiator Michel Barnier rejected the UK’s proposal for “enhanced equivalence” in financial services after Brexit, reports the Financial Times. In its recent Brexit White Paper, the Government has suggested an equivalence model that goes further than the EU’s existing frameworks, along with a unique system of joint governance and a mechanism to prevent the UK’s equivalence rights from being quickly withdrawn. Barnier reportedly told EU27 European affairs ministers on Friday that the UK’s plans would amount to a “system of generalised equivalence that would in reality be jointly run by the EU and UK,” violating the EU’s principle that equivalence is granted unilaterally by the European Commission and taking away the EU’s “decision-making autonomy.”

Separately, the director-general of the Confederation of British Industry (CBI), Carolyn Fairbairn, has said the UK’s Chequers proposal offers a “decent baseline” for business, adding that “it can be made to work for firms and form the starting point for a pragmatic Brexit that puts the economy and jobs first.” She called for “real flexibility from the European Union” to conclude the Withdrawal Agreement and provide businesses the certainty of a transition period.

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11 percent of voters support Chequers Brexit compromise, new poll reveals

A new YouGov poll commissioned by the Sunday Times reveals that 11 percent of voters would support the Government’s Brexit plan agreed at Chequers in a new referendum, with 12 percent saying the plan would be good for the UK, and 43 percent disagreeing. The survey shows that 16 percent believe Theresa May is handling Brexit negotiations well, while 34 percent say former Foreign Secretary Boris Johnson would handle negotiations well. It also reveals that 38 percent of the public would vote for a new party on the right that is committed to Brexit, 24 percent would support a far-right anti-immigrant party, and one in three voters would support a new anti-Brexit centrist party.

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Jeremy Corbyn urges Government to “step up” negotiations with the EU

In a speech yesterday, Labour Party leader Jeremy Corbyn called for the Government to “step up negotiations to reach an agreement on customs and on trade” in order to avoid a no deal Brexit scenario, warning, “No deal would be a very bad situation…because we then go onto World Trade Organisation [WTO] tariff rates that would hit the manufacturing industry and the food processing industry.”

Elsewhere, in an interview with the Sunday Express, former Brexit Secretary David Davis urged Prime Minister Theresa May to “accelerate” preparations for a no deal, saying, “If we get to the EU Council meeting and we haven’t got any progress, the threat of no deal will suddenly get very real and I think that’s the point where new ideas will play.” On the state of Brexit negotiations, Davis commented, “We’re going to have to do a reset and come back and look at it all again…When we get to the autumn, if we are in the situation where we don’t have any degree of agreement, we’re going to have to start again.”

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UK Supreme Court to examine legality of Scottish Brexit legislation

The UK Supreme Court will this week examine the legality of a Brexit Bill adopted by the Scottish parliament which seeks to preserve devolved powers after the UK’s withdrawal from the EU. Earlier this year, Holyrood passed its own Brexit withdrawal legislation, which differs from the UK Government’s EU (Withdrawal) Bill on a number of issues, for instance recognising the EU Charter of Fundamental Rights. The UK Government’s referral to the Supreme Court focuses on the legality of the Scottish parliament’s competences. A spokesperson for the UK government’s Scotland office explained, “Given the [Scottish parliament’s] presiding officer’s view at introduction that the bill was not within the legal scope of the Scottish parliament, we believe it is important to ask the court to provide absolute clarity.”

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German Chancellor says US tariffs on EU cars are “real threat” to world prosperity

German Chancellor Angela Merkel said on Friday that potential US tariffs on imported cars from the EU are “not only a violation of WTO rules, but also as a real threat to the prosperity of many in the world,” adding, “We don’t want these tariffs. We think we’ll hurt each other – they won’t just hurt us in the European Union – they could have much more far-reaching consequences.” Merkel also mentioned that Europe “cannot rely on the superpower of the United States,” and said that despite the current US-German relations being “under pressure,” the working relationship, “including with the US president [Donald Trump], is crucial for us and I will carry on cultivating it.”

Elsewhere, the Financial Times reports that European Commission President Jean-Claude Juncker’s visit to Washington this week is a final attempt by the EU to prevent the US imposing new punitive tariffs on European cars. EU officials said the meeting aims at “de-escalating” tensions and exploring “various avenues” to resolve trade concerns. However, the EU is also preparing plans to hit €10-18 billion of US imports with retaliatory tariffs if the US goes ahead.

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Henry Newman: The EU’s failure to be flexible, creative and responsive is raising the stakes

Writing in The Times Red Box, Open Europe’s Henry Newman argues that while it is fair to criticise the UK government for “negotiating with itself” or delaying decisions about what post-Brexit Britain should look like, “We must not skip over the European Commission’s absurd negotiating stances.” He writes, “Michel Barnier’s team has put just one actual offer on the table for the UK after Brexit. We can have a free trade deal, with a series of commitments and additional obligations. Those go beyond those expected of other countries with such agreements, such as Canada or South Korea. The EU justifies treating us differently partly because we are nearer.” He also notes, “There’s a bitter coda to this free trade deal. It would only apply to Great Britain. Northern Ireland would have different rules set by the EU. It would no longer be part of the UK’s internal market. Its trade policy would fall under the control of Brussels.” Henry also argues that the EU’s sequencing of negotiations, which the UK agreed to, makes it very hard to solve the Irish border question, writing, “Although the commission agreed that the UK had made “sufficient progress” back in December, it’s still not properly discussing the post-Brexit future. The UK is trapped in a Kafkaesque loop of the commission’s own design. We can’t move on without agreeing a fail-safe for the Irish border, but we aren’t allowed to resolve the Irish border by referring to our overall future relationship with the EU.” He concludes, “The EU’s failure to be flexible, creative, and responsive is raising the stakes. Key member states need to engage urgently. Otherwise we risk seeing UK-EU relations soured for decades to come.”