BREXIT: DIRECTION OF TRAVEL?
Prime Minister’s Conservative Party Conference speech:
“Let me be clear, we are not leaving the EU today to give up control of
immigration again and we are not leaving only to return to the
jurisdiction of the European Court of Justice.”
Brexit means being “a country that is no longer part of a political union
with supranational institutions that can override national parliaments
and courts.”
European Council President Donald Tusk:
“The only real alternative to a ’hard’ Brexit is no Brexit.”
KEY DECISIONS FACING UK AND EU LEADERS
How important is a UK-EU geo-strategic partnership?
•
How to continue political cooperation in many fields?
•
Internal / External security
•
Foreign policy
What economic relationship for UK?
•
Retain customs union with the EU?
•
Seek to retain Single Market membership?
•
Which immigration arrangements?
What other areas of cooperation do we want to maintain?
•
Science, education and research
UK PRIORITIES: TRADE & DIPLOMACY
1. UK will need to negotiate new arrangements with EU in several
key fields:
 Trade (goods, services, agriculture, fishing, etc)
 A new immigration/free movement regime?
 Security and counterterrorism cooperation
 Foreign policy cooperation
2. UK-specific schedule of commitments at the WTO (with EU and
then rest of WTO).
3. Secure continued access to existing EU FTAs with global trading
partners.
4. Conclude new FTAs.
PROCESS FOR LEAVING EU – ARTICLE 50
UK PRIORITIES FOR EU NEGOTIATIONS
• Resolve key trade-offs to emerge from referendum:
• Single market access/immigration control
• Single market access/greater sovereignty
• Avoid EU salami-slicing short-term and long-term issues.
• A (possibly lengthy) transitional period to avoid WTO cliff-edge
and two-year ticking clock under Article 50.
• Keep discussion at highest political level and out of hands of
Commission/European Parliament for as long as possible.
UK & ROW: SET THE WTO BASELINE
• UK needs its own WTO tariff and quota schedule – relevant to all
other negotiations (including with EU).
• Easiest option likely to be to inherit EU tariffs and apportion EU
quotas.
• Agriculture the most complex issue.
• UK does not yet have FTAs with several high-tariff countries :
• India (13.5% MFN), Brazil (13.5%) and China (9.6%).
• China is the largest (9.4%) of these market for UK goods, then
India (2.1%) and then Brazil (0.6%).
• Only eleven of the 33 EU FTAs currently in force cover services
CONCLUSIONS
• UK-EU relationship is & should be about more than just
trade.
• UK needs to establish its priorities – global liberaliser
or not? WTO and RoW likely to show more goodwill if
the former.
• New UK trade policy doesn’t have to be a zero-sum
game – goal should be to minimise the width of
Channel and narrow the Atlantic and Pacific.