11 April 2018

Labour’s shadow trade secretary rubbishes party’s six Brexit tests

The Guardian reports that Labour’s shadow international trade secretary, Barry Gardiner, has privately rubbished the Labour party’s six tests on Brexit. These tests were designed by Labour to hold the government to account in Brexit negotiations, and include a requirement to achieve “the exact same benefits” as the current relationship. Gardiner was recorded at an event last month saying, “It’s bollocks. Always has been bollocks…We know very well that we cannot have the exact same benefits.” He also dismissed the concept of a “meaningful vote” in parliament on the final deal, saying, “What is the new prime minister, the new leader of the Conservative party, going to be able to do as a result of that parliamentary vote? Do they go back and try to renegotiate a different deal in Europe? Well, there’s no time for that. Do they hold a general election?” Gardiner also warned, “Any politician who tells you what’s going to happen in September/October around that final deal is lying to you. None of us know, none of us, because it is the biggest constitutional crisis that our country has faced in about 40 or 50 years and we simply don’t see a clear way through it at the moment.” A spokesperson for the Labour party restated its commitment to the six Brexit tests, saying, “We have been clear that if those tests are not met Labour will not back it in parliament. Barry Gardiner fully supports that position.” This comes after Gardiner yesterday issued an apology for previously suggesting the Good Friday Agreement was a “shibboleth” that was “played up” for economic reasons.

Source: The Guardian

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"Norway Plus" model only way to achieve frictionless trade post-Brexit, says Barnier

The EU’s chief Brexit negotiator Michel Barnier yesterday told Sueddeutsche Zeitung that “Norway Plus,” which would see the UK remain in the EU single market and customs union after Brexit, “is the only option that allows for frictionless trade without any checks [at the borders]. With all other scenarios, there will be checks.” He added, “If the UK decided to shift its red lines [on the terms of its post-Brexit relationship with the EU], then we will shift ours as well.” On the current status of negotiations, Barnier said, “I advise not to underestimate the difficulties contained in those 25 percent of the [Withdrawal Agreement’s] text that are not yet [agreed].” He denied claims that keeping Northern Ireland in the EU’s customs union post-Brexit would put the British constitution at risk, saying, “Already today there are certain checks in Belfast for goods that are important from the rest of the UK into Northern Ireland, for example animal products.” He stressed that on the Irish border issue it was “about a technical, pragmatic solution, not ideology.”

Elsewhere, The Daily Telegraph reports that Barnier yesterday called for the UK to commit to a “non-regression clause” as part of the future agreement to prevent it lowering current standards on taxation, health and environment policy. He said, “We know Britain wants to integrate all existing standards in law. But what happens on [Brexit] day plus ten?”

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The Times: Davis wins Whitehall battle over Brexit negotiations timetable

The Times reports that Brexit Secretary David Davis had a “significant” disagreement last week with Oliver Robbins, Theresa May’s chief Brexit negotiator, over how much of the future trade deal Britain could realistically agree with the EU between now and October. The Brexit Secretary has argued that the UK and the EU will “get pretty substantively close” to a free trade agreement by October, suggesting just technical details would be left until after Brexit. Robbins wanted to resist a “big bang” negotiation in the coming months and suggested that Britain could sensibly aim for a broad, high-level document agreeing the principles for the future EU-UK relationship. The Times suggests Davis won out, with the UK sending hundreds of civil servants to Brussels to begin negotiations on the UK’s future partnership with the EU.

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CBI report: Costs of diverging from EU regulations outweighs opportunities for most businesses

A new report by the Confederation of British Industries argues that the opportunities of diverging from EU rules and regulations are “vastly outweighed” by the costs of restricting access to the EU market. The survey of businesses finds that 18 out of 23 industry sectors would prefer maintaining EU regulations, while certain sectors such as shipping, agriculture and tourism could benefit from adopting different rules and regulations post-Brexit. The CBI also calls for the UK and EU to set a new precedent for cross-border trade in services and digital products as part of the future agreement.

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HSBC survey: 62% of companies predict positive or neutral impact from Brexit on business

According to a survey of 350 firms done by HSBC banking group, at least 62% of companies that responded feel that Brexit will be positive or at least neutral for their business. HSBC also predicts that UK goods and services exports will rise by 10% in 2018 to hit £639bn, the fastest growth rate since 2011, while trade will rise by 7% by 2020. Amanda Murphy, head of commercial banking at HSBC UK, said, “Undeterred by future post-EU uncertainty, businesses clearly aim to capitalise on the cheaper pound and rising demand in key markets to boost their overseas sales.” Murphy also told the BBC’s Radio 4 Today Programme, “There is a real opportunity there. Today our traditional trading partners are the US, France, Germany, and what I think Brexit has brought for many companies is an opportunity to step back and think about where the future is – where is growth coming from?”

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Airbus CEO calls for “clarity” on post-Brexit customs and regulatory environment

The chief executive of Airbus, Tom Enders, writes in the Financial Times, “Hard borders and regulatory divergence risk blocking trade, creating supply chain logjams and causing our business to grind to a halt. These delays will hit our competitiveness…We need the UK to provide clarity on customs and ensure alignment with the EU rules that apply to our sector.” On the future UK-EU security and defence relationship, he argues that UK-EU commitments “need to be more than words,” writing, “Britain and the EU nations must adopt a more pragmatic stance on flagship space and defence programmes that seek to enable closer working between militaries. At present the UK faces being left out, which benefits only those who pose security risks to all of us.”

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China will open up its economy, says President Xi

Chinese President Xi Jinping yesterday announced a push to liberalise the country’s economy, including by “significantly” cutting import tariffs on cars, and reducing barriers to investment. Xi pledged to raise ceilings on foreign investments in banking, insurance and securities, as well as the automobile industry, and vowed to protect the intellectual property of international companies. Stressing that “the Cold War mentality and the zero-sum game are becoming outdated,” he declared these liberalising measures would be implemented “as soon as possible,” adding, “We’d like to see the fruition of China’s open policy to benefit Chinese businesses and people as well as the businesses and people of the world.” Xi also said, “China does not seek trade surplus but sincerely hopes to expand its imports.”

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Eurozone banking union reform entering “critical phase”, warns Commissioner for the Euro

Talks on a reform of the banking union are entering a “critical phase”, the European Commission Vice-president responsible for the Euro Valdis Dombrovskis has said, warning that member states were “approaching some kind of an endgame.” While member states remain divided between those in favour of pooling responsibility together and those that stress the need for greater “risk reduction,” Dombrovskis said, “All the risk-reduction measures are already either delivered or there are Commission legislative proposals put on the table…We think there is sufficient progress.” On the establishment of a European Monetary Fund, he said the Commission would not put forward any concrete proposals, adding, “We think this needs to be approached with caution… If done in a rushed and not-thought-through way, it can actually be counterproductive for financial stability.”

Meanwhile, the head of the European Stability Mechanism, Klaus Regling, yesterday also warned member states that, “We seem to be losing the momentum, rather than seizing it,” urging them to “meet somewhere in the middle” or “risk having to wait for the next crisis” for the completion of the banking union and the establishment of a European Monetary Fund.

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EU and India try to revive talks on trade deal

Negotiators from the EU and India will tomorrow meet in Brussels to explore the possibility of reviving talks on a trade deal that stalled five years ago. The EU hopes that Brexit will make it easier to reach an agreement with India, as UK’s demands on Scotch whisky tariffs and India’s calls for visa liberalisation with Britain have previously been important stumbling blocks. Sunil Prasad, secretary-general of the Europe-India Chamber of Commerce in Brussels, said, “It’s certainly not going to be easy if you think of tariffs for cars and dairy products, for example. But I see much more room for compromises now.” He also said, “Most Indian companies used to go to Britain as their point of entry into Europe… With the UK leaving, they now look to Germany, to France, to Belgium. And they hope for a trade deal to facilitate investment and trade flows.”

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Merkel: Nord Stream 2 pipeline "not possible without clarity on the future transit role of Ukraine”

German Chancellor Angela Merkel yesterday said the contentious Nord Stream 2 pipeline project, which would deliver gas from Russia to Germany through the Baltic Sea, “is not possible without clarity on the future transit role of Ukraine.” She added, “You can see that it is not just an economic issue but there are also political considerations…I also said to President Putin yesterday: it cannot be that through Nord Stream 2, Ukraine has no further importance regarding the transit of gas.” The statement was given during a joint press conference with Ukrainian President Petro Poroshenko. Meanwhile, the Ost-Ausschuss der Deutschen Wirtschaft, a body representing German business interests in Eastern Europe, warned, “To change the legal basis [for the pipeline project] with hindsight for political reasons would hurt confidence in legal certainty.”

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Prime Minister Orbán to push for anti-migrant policies and "Europe of nations" during third term

Hungarian Prime Minister Viktor Orbán yesterday said that his party’s victory in Sunday’s parliamentary elections has given him “a powerful mandate” to further pursue anti-immigration policies as well as to push for a European Union of independent and sovereign nations rather than a “United States of Europe.” Orbán said, “The Hungarian people have defined the most important issues: these are the questions of immigration and national sovereignty,” adding, “It is entirely clear…from the election result that Hungarians have decided that only they can decide with whom they want to live in Hungary, and the government will stick to this position.” He also said, “The election, in my view, also … decided that the Hungarian government must stand up for a Europe of nations and not for a ‘United States of Europe.’”

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Open Europe event: Reconciling Different Perspectives

Open Europe together with the Martens Centre yesterday held a panel debate on Brexit in Brussels, featuring former UK Chancellor Lord Lamont, Elmar Brok MEP, and Open Europe Director Henry Newman. It was moderated by Roland Freudenstein, Policy Director at the Martens Centre.

Lord Lamont said, “[Brexit] negotiations are going rather better than expected,” yet warned “the EU should not play with fire on Ireland. The UK government absolutely wants to safeguard the Good Friday Agreement.” He said that a no-deal scenario would be “immensely damaging to the UK and the EU,” but expressed optimism as “the EU has agreed to a lot of flexibility in the EU’s deal with Switzerland and this isn’t threatening the integrity of the single market.” He also mentioned that “Britain is the financial centre for many European companies and putting up restrictions would harm them.”

German CDU MEP Elmar Brok, a close ally of Angela Merkel, said, “We will not lower our high standards when it comes to financial services access for the City of London. Otherwise this would be an unfair advantage for UK companies.” He stressed, “This is a red line: a country cannot have the same rights as an EU member when it has left the EU,” adding, “The EU-UK free trade deal cannot include cherry-picking when it comes to internal market matters and there can also be no sectoral approach.” On Ireland, he said, “The deal from December is for Northern Ireland to have ‘full alignment’ with the EU but nobody knows how to translate that in legal terms. Britain disagrees with our translation but we are still waiting for theirs.” Brok also said, “The deadline of the transition stage at 1 January 2021 should not be absolutely binding. If we need a few months more, we should agree to that.”

Open Europe’s Director Henry Newman pointed out that it is “not only Britain that has its red lines,” but the EU does too, for example in its insistence that there can’t be any ‘cherry picking.’ He also said, “It won’t be a sustainable deal if the UK gets the obligations of Norway and the access of Canada.” Furthermore, he urged, “There needs to be more reflection in the EU27 why Britain, one of the most diverse and vibrant EU member states, decided to leave the EU.”

The event can be watched again here.