26 July 2018

The Times: EU27 leaders consider informal summit with Theresa May to rescue Brexit negotiations

The Times reports that EU27 leaders are considering arranging an informal summit with Prime Minister Theresa May in September to allow the UK to pitch its Brexit proposal directly to member states. Diplomatic sources told the paper that German Chancellor Angel Merkel is concerned that negotiations between the UK and the European Commission have stalled. A source said, “There is a sense of drift…It is time for leaders to have a serious discussion in the European Council.” According to The Times, EU27 leaders are concerned that without direct intervention from member states, the European Commission could reject the UK’s proposal, raising the prospect of a no deal Brexit. This follows reports that the European Commission have rejected the UK’s Chequers proposal in private, saying there “cannot be give and take” on the EU’s four freedoms. A UK government source suggested this could be “Britain’s last chance” to convince the EU of its compromise deal.

Source: The Times

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Irish Deputy Prime Minister: I don’t believe Britain can afford a no-deal Brexit

Speaking ahead of a meeting of the British-Irish Intergovernmental Council yesterday, Irish Deputy Prime Minister and Foreign Minister, Simon Coveney, said he did not believe a no-deal Brexit scenario was likely. He said, “The truth is I don’t believe that Britain can afford a no-deal Brexit, I don’t believe Ireland or the EU want that either. The negative implications of a no-deal Brexit are very significant for Ireland and the UK. We all have an obligation to make sure that doesn’t happen. I think it’s very unlikely to happen.” Coveney also said he “welcomed” the UK Brexit White Paper, adding, “We now have clarity in terms of what the British government ask is…I think there are elements of that that would be difficult to negotiate… but I think it is easier to achieve now.” Asked whether Ireland would support the UK if it sought to extend Article 50, he said, “Absolutely, if Britain asks for more time and if that is necessary to get to a sensible agreement, we would support that, of course we would.”

Meanwhile, UK Chancellor Philip Hammond yesterday said, “We don’t have a legal basis now for extending our membership of the European Union even if we wanted to do so.” On the possibility of regulatory divergence between Northern Ireland and the rest of the UK, Hammond accepted that “we have historically some divergences in regulations between GB [Great Britain] and Northern Ireland, particularly around phytosanitary animal health protection” that could be “maintained.” But he added, “I think there would be a strong resistance to creating any new areas of divergence in regulations.”

Elsewhere, Prime Minister Theresa May yesterday said that “people should take “reassurance and comfort” from the Government’s preparations for a no-deal Brexit scenario, explaining, “We are working for a good deal – I believe we can get a good deal – but… because we don’t know what the outcome is going to be… let’s prepare for every eventuality.” This comes as Brexit Secretary Dominic Raab writes in The Daily Mail, “There is no deal unless we agree the whole deal – it must work for the UK and the EU…In case our ambition and energy are not matched, we are stepping up our preparation for no deal.” He outlined plans to hire 1000 extra Border Force officials and distribute notices to industry and individuals on how to prepare for no deal.

Separately, a new ICM/Guardian poll reveals that 26 percent of voters believe that Theresa May can negotiate a good Brexit deal for the UK, down from 16 points in January and 34 points before the 2017 general election.

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No deal Brexit would send a "terrible sign" to the rest of the world, says Business Secretary

In an interview with Le Monde, Business Secretary Greg Clark warned that a no deal Brexit “would be bad for all the countries and citizens of the EU,” adding, “At a time when protectionism is growing, if the European Union, whose members have for decades shared common values, didn’t manage to find an agreement, that would be a terrible sign for the rest of the world.” Asked what the UK’s industrial strategy would look like after Brexit, he said, “We will maintain those things that have made Great Britain successful, such as an open and liberal economic, supported by international cooperation.” Asked what relationship he expected with the US, Clark said he expected “good trading relations,” but stressed, “But we stand with the EU on the subject of tariffs. A trade war is harmful for everyone.”

Elsewhere, International Trade Secretary Liam Fox yesterday said that the UK hopes to begin talks on a free trade agreement with the US as soon as possible after it leaves the EU in March 2019, adding however that the Trump administration has to notify Congress before the end of December of its intention to begin negotiations. Fox added that the UK began public consultations on a UK-US trade agreement with this timetable

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UK begins process to separate from the EU at the WTO

The UK and the EU formally began the process to split at the World Trade Organisation (WTO) on Tuesday, with a draft membership agreement separating the UK’s rights and obligations in merchandise trade from the EU’s, and another split in services trade to follow up later. The WTO stated that members “will have three months to review the schedule [the draft document], which will be considered to be approved if there are no objections from other members.” Reuters reports that seven states focusing on agricultural supplies have stated their disapproval of the divorce terms, as they will lose flexibility to switch exports between the UK and the EU27.

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UK could gain associated country status for access to Galileo, says head of French space agency

In an interview with Les Echos, the president of the French space agency CNES, Jean-Yves Le Gall, said, “The British will be able to continue using Galileo [the EU satellite navigation system] and the British government could potentially obtain the status of an associated country, like Norway and the US, allowing them to continue using Galileo’s government service [PRS], under certain conditions.” Le Gall also noted that the UK station in charge of monitoring Galileo’s secure system PRS will be closed in March 2019, and a new site will be opened in Madrid.

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EU and US agree to work towards eliminating tariffs on non-auto industrial goods

European Commission President Jean-Claude Juncker and US President Donald Trump yesterday reached a deal on trade, agreeing to work towards eliminating tariffs on all industrial goods except automobiles, to increase cooperation on energy purchases and work together to reform the World Trade Organisation (WTO). They also agreed that there would be no new tariffs imposed while negotiations are ongoing, and punitive tariffs on steel and aluminium would be reassessed. Trump said, “We agreed today, first of all, to work together toward zero tariffs, zero non-tariff barriers and zero subsidies on non-auto industrial goods. We will not go against the spirit of this agreement, unless either party terminates the negotiation. We’re starting the negotiation right now but we know very much where it’s going.” Trump added that it was a “new phase” in EU-US relations, and that “This will open markets for farmers and workers, increase investment, and lead to greater prosperity in both the United States and the European Union… If we team up, we can make our planet a better, more secure and more prosperous place.” Juncker commented, “When I was invited by the president [Trump] to the White House I had one intention…I had the intention to make a deal today. And we made a deal today. This was a good, constructive meeting.”

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