11 May 2018

The Times: Theresa May splits cabinet to develop customs solutions

The Times reports that Prime Minister Theresa May has divided her Brexit cabinet committee into two working groups to develop the government’s two existing customs proposals. Trade Secretary Liam Fox, Environment Secretary Michael Gove and Cabinet Office Minister David Lidington will work on the customs partnership proposal, which would see the UK continue to levy EU tariffs on imports but offer a rebate on goods whose final destination is the UK. Business Secretary Greg Clark, Northern Ireland Secretary Karen Bradley and Brexit Secretary David Davis will work on the maximum facilitation option, which would use international best practice models and technology to minimise friction at the borders. The groups are designed to include the ministers with department responsibility for areas most affected by each of the proposals. The cabinet committee is expected to meet again next Tuesday.

Elsewhere, the chair of the Conservative European Research Group, Jacob Rees-Mogg, yesterday rejected suggestions that the UK could negotiate a customs union extension after the transition, saying, “The customs union means we are effectively staying in the EU.” Separately, the government is delaying reintroducing the Trade and Customs bills in the House of Commons until the autumn over fears the government could be defeated.

Source: The Times Financial Times

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Michael Gove concerned about Irish border issue used as "Trojan Horse" in Brexit negotiations

Environment Secretary Michael Gove is concerned that the EU’s “backstop” solution to the Irish border issue could be used as a “Trojan Horse” during Brexit negotiations to keep the UK in the EU customs union and single market, a source told the Daily Telegraph. Gove is reportedly worried that if the UK accepts the “backstop” option, then it “won’t have all the negotiating cards that we would want to have in that transition period.”

Elsewhere, speaking at an event in London yesterday, former UK Prime Minister John Major said that there is  “no sensible alternative” to the EU customs union in order to avoid a physical border on the island of Ireland, adding, “Ingenious options… have been proposed but rejected by Cabinet sub-Committees, with the limp promise that further ideas will be sought. No doubt the search will intensify – but I doubt it will be successful.” Separately, Irish Foreign Affairs Minister Simon Coveney yesterday told UK ministers that the Irish Government and the EU wanted to see “substantial and measurable” progress on the Irish border issue by the European Council Summit in June.

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MPs warn adequate trade remedies might be not be in place by Brexit

The House of Commons International Trade Committee yesterday urged the government to take steps to ensure that the Trade Remedies Authority (TRA), which should take the place of the European Commission in ensuring adequate trade remedies to protect British companies can be put in place post-Brexit, is ready in time for March next year. Angus MacNeil MP, chairman of the International Trade Committee, told The Daily Telegraph, “Especially now we’ve seen the game Donald Trump is playing, if you don’t have a TRA you won’t last beyond the first battle in a trade war,” adding, “With March 2019 fast approaching, we have identified serious concerns about whether the TRA can be established, appropriately resourced, and fully operational by the Government’s self-imposed deadline.”

Following this, the government yesterday announced that the new Trade Remedies Authority will be based in Reading.  A spokesman for the Department for International Trade said, “We will continue to work with Parliament, businesses and other stakeholders to establish an effective trade remedies framework by the time the UK leaves the EU.” Trade Minister Greg Hands said, “Leaving the EU gives us an opportunity to build new trade links and reach those markets where demand for UK goods and services are growing. But our first priority is, and will always be, to ensure UK industries have the protections they need.”

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Brexit could increase delays to criminal extraditions, MEP warns

The UK’s framework for a post-Brexit security partnership with the EU is facing criticism from EU officials, the Guardian reports. Member of the European Parliament and chair of its justice and home affairs committee, Claude Moraes, warned that after Brexit there are risks of criminals hiding in Europe without the possibility to extradite them, due to difficulties in the UK and the EU agreeing an extradition treaty. Moraes said, “It is not just that we go back to the bad old days of months of delays, which is bad enough, but as a third [non-EU] country we [the UK] could face even more restrictions.” This comes after the UK has published on Wednesday its vision for a post-Brexit new internal security treaty, calling for continued UK access to police and crime data sharing.

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Bank of England delays raising interest rates

The Bank of England (BoE)’s Monetary Policy Committee yesterday decided to hold interest rates at 0.5 percent, as it stressed that the UK economy has hit a “temporary soft patch”. The BoE has also revised its forecast for the UK’s economic growth from 1.8 percent in February to 1.4 percent, but said it expected the economy to grow again in the coming months.

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Government sets out proposals for an independent environmental watchdog after Brexit

The government yesterday published proposals to create a new statutory, independent environment watchdog after Brexit which would hold ministers to account over environmental commitments. Under plans put out for consultation, the body would scrutinise and advise on environmental laws and policy and would be able to enforce standards. Environmental groups have however lamented that the body would lack the power to prosecute government. Environment Secretary Michael Gove also laid out plans for an Environmental Principles and Governance Bill to ensure ministers “have regard to” key environmental principles when devising laws.

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Majority of British in favour of final vote on Brexit deal, study suggests

A new poll commissioned by the People’s Vote campaign suggests that 53 percent of the British population are in favour of a vote on the final Brexit deal, with 31 percent opposed. The majority is bigger among Labour voters, with 69 percent of them favouring a final vote, and just 18 percent who don’t.

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Macron: “Germany can’t have a perpetual fetish about budget and trade surpluses”

Speaking yesterday at the award ceremony of the Charlemagne Prize, French President Emmanuel Macron reiterated his demands for “a stronger Eurozone [that is] more deeply integrated, with its own budget allowing for investments and converging,” and called on the German government “to draw up its response [to his proposals] by June.” Macron said, “Germany can’t have a perpetual fetish about budget and trade surpluses, because they come at the expense of others… I very much hope that the [German] Chancellor [Angela Merkel] and her government live up to their responsibilities at this historic moment.”

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Space industry calls for a UK space programme

In a new document, entitled Prosperity from Space, the Space Growth Partnership (SGP), which brings together industry, academia and policymakers, says “Industry believes that opportunities arising from potential smart government procurement and a national space programme would allow industry to invest more than £1bn.” The SGP calls for a closer partnership between government and industry post-Brexit, stressing, “The decision to leave the EU creates [a] particular need to raise our game and avoid complacency,” adding that the UK must “address the faultlines running through our current way of working, chief of which is the absence of a joined up, UK-focused long-term national programme that allows us to unlock the full potential of our industrial-academic power base.” Commenting on the document, science minister Sam Gyimah said, “We want the UK to thrive in the commercial space age and have committed £150m in our Industrial Strategy to help develop advanced rocket engines, test satellites and establish spaceports in the UK for the first time.”

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Merkel warns Europe can no longer rely on the US for protection

Speaking at the same event, Merkel warned, “It is no longer the case that the US will simply just protect us… Rather, Europe needs to take its fate into its own hands. That’s the task for the future.” The same sentiment was echoed by Macron in an interview given to a German broadcaster later that day, saying, “Europe is in charge of guaranteeing the multilateral order that we created at the end of World War II and which today is sometimes being shaken.”

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“The building of Europe is shaking,” Italian President of the Republic warns

Speaking in Florence yesterday, the Italian President of the Republic Sergio Mattarella warned, “The building of Europe is shaking,” adding, “The European project has lost its ability to meet the expectations of large portions of the population.” However, he cautioned against the dangers of the “sovereignist narrative,” criticising Italians for seeking “refuge in a purely domestic dimension, nurturing an illusion that their problems can be dealt with at only the national level,” and stressing on the contrary that “irreversible unity” at the European level is “urgent.”

This comes as coalition talks between the Five Star Movement and the League yesterday made “significant steps forward”, according to Luigi Di Maio and Matteo Salvini, the leaders of the two parties.

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