REGULATION Brexit - complications David Wright, UKLA Director General
In October, the UK Parliament should be in a position to ratify any agreement on Brexit that it has reached with the European Union (EU) ahead of ratification of the agreement by all member states.
Over the summer negotiating positions on both sides have been in a state of flux following publication of the UK Government’s position, called the ‘Chequers agreement’, setting out principles on the movement of goods, services, capital and people between the UK and the EU.
The EU Chief Negotiator Michele Barnier gave a strong rebuttal to the agreement as it did not accord with the existing EU negotiating position which has already been published.
At the same time French President Macron has stressed his desire not to see a blind Brexit whereby the UK would leave the EU in March 2019 without any certainty over the shape of a future trading relationship. This leaves the EU position conflicted between wishing to agree a deal based on the desire to retain the UK as an effective trading neighbour, and not to be seen to be too soft on the UK for leaving. The UK position is to seek to agree a deal along the lines of that already agreed between the EU and Canada, but which goes further. Alignment of regulation on goods but not services would enable the UK to continue to trade with the EU on physical products but would allow the UK to retain the right to protect the City of London’s position as a leading financial centre.
The mantra in the British Press that ‘nothing is agreed until everything is agreed’ has led to some reporters raising the prospect of a ‘no deal’ however unlikely that might be.
The view that the sizeable divorce settlement of £40bn would be contingent on reaching an amicable trading agreement, could be an issue given the state
of negotiations surrounding the Irish border issue.
UK Government departments have been openly talking about drawing up plans for a no deal with anything over and above that seen as ‘a bonus’. Indeed it published 25 technical papers on the implications of a ‘no deal’ over the summer.
The United Kingdom has a backstop that no one really wants to see of World Trade Organisation (WTO) terms as the clock ticks down to March 2019, the notional date of exit, and then starts ticking down again to December 2020, the end date of transition.
WTO terms average around 3.5%, so scaremongering in the UK press about encouraging citizens to stockpile food and water as the Army could be called in, really misses the point.
Already much of the UK’s food comes from territories further overseas than the European Union. Beef from Argentina, lamb and wine from New Zealand, or even bananas from the Winward isles mean that given WTO trading terms then supplies need not suffer over the short-term.
The bigger issue at play is political movement to head off Brexit by way of a second referendum of the people to the terms of exit, both the divorce settlement and the future trading agreement hinted at by Tony Blair, former UK Prime Minister.
If a three question ballot paper is drawn up asking the electorate whether they agreed the terms of exit, rejected the terms of exit or wished to remain a member of the European Union then the Brexit vote could be split.
This is the issue Brexiteers fear the most, another vote overturning the previous decision and the UK remaining a member of the European Union.
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LUBE MAGAZINE NO.147 OCTOBER 2018
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