13 November 2018

Theresa May: Brexit negotiations now “in the endgame”

Speaking in London yesterday, Prime Minister Theresa May said Brexit negotiations “are now in the endgame,” adding, “We are working extremely hard, through the night, to make progress on the remaining issues in the withdrawal agreement, which are significant.” She also said that she “will not compromise on what people voted for in the referendum. This will not be an agreement at any cost.”

Elsewhere, the Financial Times yesterday reported that the EU’s chief Brexit negotiator Michel Barnier told the EU27 European affairs ministers at the General Affairs Council meeting that the main elements of a UK-EU Withdrawal Agreement text are almost ready and that they will soon be presented to the UK cabinet. The paper cites unnamed officials reporting Barnier as saying, “As of this moment, this agreement is still not reached. As in any negotiation, the final stretch is always the most difficult. On the basis of our common efforts, the parameters of a possible [Withdrawal] Agreement are very largely defined… We are at an extremely sensitive moment. The smallest public comment from my side could be exploited by those who want the negotiation to fail.”

Meanwhile, a European Council statement said that Barnier “explained that intense negotiating efforts continue, but an agreement has not been reached yet. Some key issues remain under discussion, in particular a solution to avoid a hard border between Ireland and Northern Ireland,” adding, “During the meeting, ministers however also recalled the need to continue the work at all levels on preparations for every possible scenario.” This comes as Barnier will today attend the meeting of the EU’s College of Commissioners to give an update on the state of Brexit negotiations.

Separately, a Downing Street spokesperson said, “We have made good progress in the negotiations in relation to the Withdrawal Agreement but there are substantial issues still to be overcome in relation to the Northern Irish backstop. That remains the case. The talks are ongoing,” adding, “We want to make to progress as quickly as possible in these negotiations but we have also said that cannot be at any cost. That remains the position.” According to the Daily Telegraph, the Cabinet is not discussing a proposed Brexit deal today.

Source: Politico Financial Times European Council Press Association The Daily Telegraph

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Irish Foreign Minister: this week “very important” for Brexit deal

The Irish Foreign Affairs Minister, Simon Coveney, told reporters in Brussels yesterday that “this is a very important week for Brexit negotiations,” adding, “The two negotiating teams have really intensified their engagement.” Speaking after a meeting of Europe ministers with EU chief Brexit negotiator Michel Barnier, Coveney added that the “solidarity [from member states] for Michel Barnier and his negotiating team is stronger now than it’s ever been.”

Speaking after the same meeting, the French Europe minister Nathalie Loiseau said that any exit mechanism from a temporary customs backstop could not be triggered unilaterally by the UK. She said, “If you have any sort of temporary arrangement, this [exit mechanism] needs to be a bilateral decision from the EU27 and the UK at the same time, and we have to know at that moment what sort of solution there is for the Irish border.” Michael Roth, the German Europe minister, said, “A customs union is an option but we must be careful that it doesn’t lead to unfair relations between the EU27 and the UK, particularly in environmental, workplace and social standards.” Didier Reynders, the Belgian Minister of Foreign Affairs, suggested that a special Brexit summit to seal a deal in November was unlikely, explaining, “to organise a summit you need to have some progress… We have seen some movement but it seems to be not enough.”

Separately, The Sun reports that UK officials are considering a special EU28 summit on December 4-5 if no agreement is reached by Wednesday night this week.

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Cabinet could act as “check” on Brexit deal, suggests International Development Secretary

The International Development Secretary, Penny Mordaunt, has told Sky News that there are “two checks” on the Brexit deal, in the form of Cabinet and Parliament. Mordaunt added, “It’s Cabinet’s job to put something to Parliament that’s going to deliver on the referendum result. We need to work together as a Cabinet to do that.” Meanwhile, the Prime Minister’s spokesman said, “The Cabinet has backed the Prime Minister in moving forward with her negotiations with the EU and I expect Cabinet will continue to do so.”

Elsewhere, BuzzFeed News reports that a group of senior Cabinet ministers, led by Brexit Secretary Dominic Raab, are expected to tell the Prime Minister that they will not support a Brexit deal which contains a Northern Ireland-only “backstop to the backstop” or does not include a unilateral “break clause” to allow the UK to leave a UK-wide customs arrangement. Raab has reportedly told colleagues that a No Deal Brexit would be preferable to a deal which breaches either of these red lines, according to UK officials. This comes after reports that a group of ministers, including Raab, Trade Secretary Liam Fox, Environment Secretary Michael Gove, Development Secretary Penny Mordaunt and Attorney General Geoffrey Cox, held a meeting yesterday evening. Meanwhile, former Brexit Secretary David Davis has also argued that the government “should be prepared to exit without a deal” if the EU does not compromise.

Separately, Labour’s Shadow Brexit Secretary, Sir Keir Starmer, told Sky News yesterday that “Brexit can be stopped.” This comes after the Labour leader Jeremy Corbyn said on Friday that “we can’t stop [Brexit].” Starmer also cast doubt over the possibility that Labour would help the Government get the Withdrawal Agreement through Parliament. Describing the possible sequence of events, he said, “We’ll look at the deal and vote it down if it doesn’t meet our tests. If that happens, we will call for a general election. If that doesn’t happen, then all options must remain on the table. That includes the option of a public vote.”

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Labour to use “humble address” to demand Government publish legal advice on Brexit deal

The Labour Party today will use a “humble address motion” demanding that the Government’s legal advice on the Withdrawal Agreement, including the Irish backstop, is published when Parliament has to vote on a Brexit deal. This comes as The Sun reports that the European Research Group (ERG) of Eurosceptic Conservative MPs has presented its own amendment to the motion, demanding that the Government publish a “full, reasoned position statement laying out the government’s political and legal position” on a Brexit deal. ERG deputy chairman Mark Francois said on the amendment, “We all appreciate the convention that the Attorney General’s advice is not usually published. However, this is potentially so important that it could affect the destiny of this country. So to make an informed decision, it’s critical Parliament sees the same legal advice as the Cabinet.”

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EU expected to publish No Deal document if no agreement is reached this week

The Daily Telegraph reports that the European Commission will publish a No Deal document if UK and EU negotiators fail to reach agreement on the withdrawal text this week. The plan is expected to say that the EU will only take action to mitigate No Deal disruption in areas where “vital Union interests” are at risk. One senior official told The Telegraph that absent agreement this week, “The Commission will publish the notices and just sit on its hands and let the pressure build…The UK will just have to make some hard choices.”

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12 WTO members urge EU to offer “appropriate compensation” for post-Brexit change in market access

Bloomberg reports that twelve WTO member states have urged the EU to provide “appropriate compensation” if “the quality and level of access currently enjoyed to the EU” is not maintained following the UK’s withdrawal from the EU. The document, signed by members including China and the US, also calls for the EU to “provide clarity on how it intends to account for UK-EU trade” post-Brexit. It notes that changes stemming from the UK’s exit are of “general and systemic interest to the WTO membership” given their “unprecedented scale and scope.”

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Four Northern Ireland parties call for EU to remain firm on backstop demands

Four Northern Ireland political parties, Sinn Fein, the Social Democratic and Labour Party (SDLP), the Alliance and the Greens,  yesterday called the EU to remain firm in its demands for a permanent backstop arrangement which would keep Northern Ireland aligned with the EU customs union. Speaking in London, Michelle O’Neill, Vice President of Sinn Fein, said, “The backstop needs to be permanent…There can be no backtracking from that position on the backstop that [Prime Minister] Theresa May and her Government signed up to in December last year,” adding, “We are very much looking towards the EU to remain steadfast in the position which they have adopted, and that we hold the Irish Government to account for their role in all of that as well.”

Meanwhile, Sinn Fein’s policy of abstention from the Westminster Parliament has been criticised by Liberal Democrat Leader, Vince Cable, and Nigel Dodds, the Parliamentary leader of the DUP.

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“It is time to decide” on Eurozone reform, says French Finance Minister

French Finance Minister Bruno Le Maire told German newspaper Handelsblatt that decisions on the reform of the Eurozone “have to be made within the coming weeks… we have discussed [these things] for a long time, now it is time to decide,” adding, “I hope that the German government will in the coming weeks give concrete answers to the proposals made by [French President] Emmanuel Macron.” Le Maire said that “the EU [Council] Summit in the middle of December is of special importance,” since “after that, the campaigns for the European elections begin, and everybody knows that election campaigns are not the best moment to take wide-reaching political decisions.”

On French plans for a Eurozone budget, he said, “The most important point for me … is that we agree its [the budget’s] tasks and instruments,” adding, “The size of the budget is secondary at the start. Once the budget has proven its efficiency, then I don’t have any doubt [that] it will grow in the years thereafter.”

Elsewhere, Le Maire told newspaper Les Échos that the December European Council Summit “is essential not only for Europe but also for the Franco-German relationship,” adding that without a European agreement on a digital tax on big companies, “There will be a mosaic of national taxes. Italy, Spain and the UK have just decided. A series of national taxes will weaken the internal market.” He also urged to protect and promote European technology, saying, “We must make Europe a peaceful empire, a power capable to rival with the US and China.”

Meanwhile, German Finance Minister Olaf Scholz yesterday said that the EU should wait with the introduction of a European digital tax until 2021, to see whether ongoing negotiations at the OECD may deliver results prior to that. He said that Germany and France were “in principle in agreement” about this approach. Scholz also said that he aimed for the EU to agree the development of the European Stability Mechanism (ESM) into a European Monetary Fund (EMF) before the end of this year.

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EU Commission President signals US automobile tariff hold-off might only last until end of 2018

In a speech on Monday, European Commission President Jean-Claude Juncker said, “There will not be a new trade conflict [with the US] over the summer months until the end of the year, particularly with regard to car tariffs,” suggesting tariffs could be reintroduced at the end of the year. Juncker also said, “We are still continuing with negotiations on all levels” with the US.

This comes as EU Trade Commissioner Cecilia Malmstrom told reporters last week that the US demonstrated little concern for reaching an agreement on tariff reduction for industrial goods, instead focusing on closer regulatory cooperation.

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Negotiating a Brexit transition period key for forecasts, says Bank of England

Deputy Governor of the Bank of England Ben Broadbent said yesterday, “The most crucial assumption, certainly for our monetary policy horizon for two-to-three years, is will there be a transition period agreed as part of that withdrawal agreement?” He added, “In each and every case, we’re assuming that there will be a smooth transition to that eventual outcome. So what matters for the forecast crucially is negotiation of that transition period.”

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Henry Newman: A Brexit deal isn’t certain, but it’s within reach – and it could still make it through Parliament

Open Europe director Henry Newman writes in his ConservativeHome column, that the delay in Brexit negotiations “means that some of the Government’s No Deal plans will need to be switched on… Many of the mitigation measures for No Deal simply can’t be turned on at the last second.” He warns, however, “Senior figures in the European Commission are concerned that as No Deal plans are activated (on both sides), there’s a danger that we get set on a slippery path towards such an outcome. No Deal could become self-fulfilling.”

In case of a breakdown of negotiations, he cautions, “A ‘No Deal No Deal’ – exit without any side agreements – would mean that the EU was willing to treat the UK in a manner akin to North Korea, rather than as a partner and close ally. It’s hard to see this situation lasting, with Ireland in particular in line for a huge economic shock, and an enormous hole blown in the Commission’s budget.”

Looking ahead, Newman writes, “Although a deal isn’t certain, it’s within grasp. And if it is agreed, and passes Cabinet with the Government still broadly intact, then my hunch is that it will ultimately pass Parliament.”