On 17 January 2017, Theresa May revealed the UK’s objectives in the Brexit negotiations. One of the top priorities would be to build a “Global Britain”, with the ability to define its own commercial policy and strike trade deals with third countries, while maintaining a great degree of preferential access to the EU single market. In this framework, the key points of the UK’s strategy on international trade are:
- The UK will not remain in the single market;
- The UK will try to strike a comprehensive and ambitious FTA with the EU with the greatest market access possible, on a reciprocal basis;
- The Norway and Swiss models are ruled out because the UK wants to control immigration. Indeed, these models provide preferential market access to the EU single market for goods, but require the free movement of people;
- The UK would also like to have some customs arrangement with the EU, without being submitted to the EU Common Commercial Policy/External Tariff, which is not possible.
- This rules out the full Customs Union model. A Customs Union provides tariff-free access to goods originating inside the Customs Union and requires the application of a common external tariff in the trade relations with countries outside the Customs Union.
- Theresa May singled out exports of cars/lorries and financial services as areas in which she would like to maintain the current elements of the single market, which suggests the PM will try to negotiate special trade conditions for these sectors;
- The acquis communautaire (EU legislation) will be transposed into national legislation to avoid disruptions following Brexit, and may be reformed by the UK Parliament afterwards;
- The UK will negotiate new schedules of commitments at the WTO.
In terms of procedure:
- The final Brexit deal will be submitted to both Parliament houses for approval;
- The UK wants the future UK-EU relationship to be negotiated within the 2-years deadline of article 50 of the Treaty of the European Union, which contradicts the EU position to negotiate the new relationship only after the actual exit.
Theresa May Brexit plan would result in increased tariffs for businesses with trade flows between the EU and the UK and the UK and third countries. As the UK would leave the EU single market, the corresponding trade preferences would cease to apply, including those stemming from the Free Trade Agreements negotiated by the EU with third countries as well as other preferential trade arrangements.
Do you know how Brexit will impact your business? For an analysis of the potential impact on market access and customs as well as strategic advice concerning cost saving opportunities you may contact us at email@example.com or +32 (0)15 46 08 46.