Brexit Update 6th July 2017

By July 20, 2017 Brexit Updates

Top 3 developments

Barnier warns UK: “you cannot be half in or half out of the single market”

Barnier dashed the hopes of Brexiteers who think that “frictionless” trade outside the single market is possible

The Japan-Europe trade deal has been reached

After four years of talks, the EU and Japan have reached a trade deal that will remove tariffs from 99% of goods traded between the EU and Japan.

The Tories continue to squabble over Brexit

Divisions within the party show no signs of healing.

UK Update

Barnier bashes Brexiteers’ trading aspirations

In his first major speech since Brexit negotiations began, Chief EU Brexit negotiator Michel Barnier has quashed any fantasy that the UK can leave the single market without incurring costs, or can leave the EU without leaving behind the advantages of the EU. Barnier said that “frictionless trade… is not possible… You cannot be half in or half out of the single market.” The ramifications of Brexit have not been “fully understood across the Channel”, Barnier declared.

Repeal Bill due next week

The Repeal Bill is set to be presented to parliament next week. The Bill, which seeks to repeal the 1972 European Communities Act and copy all existing EU legislation into UK law, will be tabled just weeks before the summer recess begins – meaning that the real scrutiny will take place September onwards. Labour’s Brexit spokesperson in the Lords, Baroness Hyter, hinted that the party will not block the Bill but it will be interesting see how many – in parties of both colours – actually toe the party line.

Tories still infighting over Brexit. In other news, water still wet.

You may experience a sense of déjà vu reading that infighting still abounds amongst the Tories. Brexit still lies at the heart of this division. One Conservative Remainer MP divulged plans to tackle Brexiteers in the party to the Financial Times: “We can work with half the Labour party” to “crush” Eurosceptics.

As it stands, the European Court of Justice can overrule UK parliament, and whether or not Britain should remove itself from its remit post-Brexit remains a source of major friction. May has taken to repeating that Britain must leave the ECJ’s remit in order to “take back control”. Many Tories are conceding that this position is incompatible with the widely-held wish to secure a generous trading agreement with the EU. The ECJ, after all, is effectively the arbiter of the single market. James Chapman – who recently stood down as chief of staff to Brexit Secretary David Davis – recently condemned May’s “absolutist” approach to the ECJ. Shadow Brexit Secretary Sir Keir Starmer slammed her “ideological and deeply unhelpful red line” over the issue.

Steve Baker pushes for hard Brexit; Cameron intervenes

The squabbling continues. Brexiteer – and Brexit Minister – Steve Baker said that any talk of Britain remaining in the European Economic Area (in other words, the single market), is to put “blood in the water… we don’t want to be a rule taker”. Meanwhile, David Cameron has apparently been phoning Remainer backbenchers urging them to agitate for “the Norway option”. This would include access to the EU’s common market. It has previously been called the “nearly but not quite” version of EU membership. It’s cheaper than membership – but not by much.

Additionally, Jeremy Hunt and Greg Clark – the UK Health and Business Secretaries respectively – published an open letter to the EU pleading for “a deep and special relationship with the EU” regarding medicine, regardless of the nature of Brexit.

Whatever I said, whatever I did, I didn’t mean it – I just want EU back for good

Newsnight’s political editor, Nick Watt, has alleged that “I am beginning to hear talk in some quarters that Brexit may not actually happen”. He said that this “strong chance” was due to a “stalling economy and investor fear over a possible Corbyn premiership”.

Love’s Labour’s Lost

Whilst fear of Corbyn’s popularity has – to some extent – united the Tories, he continues to divide his own party. Labour party chair and Corbyn ally Ian Lavery declared the party “too broad a church”, and implied that MPs will no longer be guaranteed selection in their seats. He later clarified that “we are an extremely broad church… I never once mentioned deselection”. It’s not just the Tories pulling u-turns.

Burnham bashes banker Brexit

Greater Manchester Mayor and former Labour Minister Andy Burnham recently demanded that Britain’s regions must get “a permanent seat at the Brexit table”. A press release ahead of a speech due on Wednesday revealed that Burnham is set to criticise a “London-centric Brexit dominated by the City of London and the financial services industry”.

If EU leave me now, you take away the biggest part of the economeee!

That headline isn’t wholly accurate, although a 2016 report from HMRC did indicate that the net fiscal contribution of immigrants was £2.54 billion. It might not be this way for long, however. Reports have found that skilled workers are fleeing the UK in droves. A survey by law firm Baker McKenzie found last month that more than half of the skilled EU workers employed by FTSE 250 companies are likely to leave Britain before negotiations are wrapped up. A survey of 2,000 workers undertaken by Deloitte found that 47% of highly skilled workers are considering leaving the UK in the next five years.

European Update

No matter what EU do (or call ridiculous), I only want to be with EU!

A misty-eyed Macron recently gushed that the EU is about “a common destiny”. However, that’s not to say that it’s all roses in the European Parliament. Tuesday saw European Commission President Jean-Claude Juncker fume at the largely empty chamber in Strasbourg, France, after only 30 out of 751 MEPs showed up to the plenary for Maltese Prime Minister Joseph Muscat’s speech. “The European Parliament is ridiculous, very ridiculous,” raged Juncker. He has since apologised for his hot temper.

Juncker struck a more reflective tone in a letter he penned with Council President Donald Tusk for world leaders ahead of the G-20. They deemed the EU the “global point of reference for all those who value the principles of liberal democracy and human rights, (and) free and fair trade”. “A strong and determined Union is the best way to promote our values and interests, to support a rules-based multilateral system, and ultimately to protect and defend citizens”, they concluded.

“Ecstatic Europeans” wrap up Japanese trade deal – whilst Theresa gets lumped with Trump

The EU and Japan have formally agreed the outline of a free-trade deal, leaving European diplomats “ecstatic”. At the post-deal conference, Donald Tusk – European Commission President – lambasted British Euroscepticism: “In the context of the discussion about Brexit, we have heard statements claiming that it isn’t worth being in the European Union, as it is easier to do global trade outside of the EU. Today we have shown that this is not true. The EU is more and more engaged globally… No individual member state could ever hope to achieve what the EU can achieve together.” “As long as China and the US are off the table, this is basically the biggest FTA that Europe can pursue,” said Hosuk Lee-Makiyama, director of the European Centre for International Political Economy.

Meanwhile, Theresa May is due to challenge Donald Trump over his disregard for climate change at the G20.

Merkel many-mates forges trading links; May doesn’t

Angela Merkel’s talks with China are going well. Merkel has described Beijing as a partner in “troubled times in the world”. Germany is pushing for resolution of China’s status in the World Trade Organisation. “We also want a speedy conclusion of an (EU-China) investment treaty, which can one day also lead to a free trade agreement,” Merkel said. “I made clear that we expect to always be given equal treatment and that both sides provide each other with access to markets,” she added. “This is very, very important for our companies.” President Xi Jinping has given Berlin Zoo two beautiful young pandas, a gift to show what he deemed a “new beginning” in relations between the two countries. Last year May spoke of a “world of wonderful opportunities” posed by Brexit. However, these opportunities may well be scarce if proposed trading partners are forming increasingly close ties with EU powerhouses.

Timeline

  • 20th July – 5th September – parliamentary recess
  • July 17th – second round of Brexit talks
  • 24th – 27th September – Labour Party Conference
  • 1st – 4th October – Conservative Party Conference
  • October 19th – EU Summit