Brexit

Brexit roadmap

  • 6 sets of negotiations
  • The divorce settlement
  • FTA with the EU
  • Interim deal
  • Regularising the UK’s WTO scheduled commitments
  • Agreements with countries that have FTA’s with the EU
  • Foreign, Defence, Police, Judicial, and Counter-Terrorism Co-operation
  • FTA’s with countries who do not have agreements with the EU – the rest of the world
  • EU’s approach to the BREXIT negotiations
  • The economic dangers of political wishful thinking?
  • Conclusions
  • European political timeline

‘It is true that leaving the EU will allow the UK to pursue a nimbler and more nationally focused international trade policy. Global Britain is a laudable goal. But it is ironic that we start by withdrawing from the world’s most sophisticated regime for free trade in by far our largest market. It’s a bold case of “reculer pour mieux sauter” [i.e. ‘drawing back to leap better’]…

The journey can only start from where we stand today. In 2015, 44% of total UK exports of goods and services went to the EU, and 53% of total UK imports came from the EU. The EU is the biggest market for all major sectors of the UK economy. The 50 countries with which the EU currently has FTAs accounted in 2015 for 13% of our trade. That rises to 25% if you include countries with which the EU is currently negotiating.  This means that almost 60% of our trade will be directly affected when we leave the EU. In the same year, 20% of total UK exports of goods and services went to the US, and 11% of our imports came from the US, amounting to around 16% of our total trade. 8% of UK exports went to all the BRICS countries  – Brazil, Russia, India, China, South Africa  combined. 11% of our imports came from the BRICS. The Commonwealth accounted for 9.5% of our exports and 8% of our imports. Of that Australia received 1.6% of our exports and provided 0.8% of our imports. New Zealand accounted for 0.2% of both exports and imports. The EU provides 54% of our direct inward investment: France over 8%; Germany over 6%; The Netherlands over 17%. Almost 32% of FDI into the UK comes from America. The BRICS, excluding of course Hong Kong, account for 1.6% of our inward FDI. Of our outward FDI almost 43% goes to the EU, 23% to the US and 5% to the BRICS… [These]  figures… tell a clear story. Whatever our longer-term goal, the EU and the US together constitute over 60% of our export market and will remain at the heart of our trading relationships. Certainly, the ratios may change over time, not least as a consequence of Brexit. Trade with the EU has fallen from 55% of our total in 1999 to 44% today. But significant structural change will not happen rapidly , and there will be a floor.  There is strong evidence that trade flows are influenced by geographical proximity. Switzerland has about one third of the population of Canada, but imports twice as much from the UK. It is our third largest trade partner outside the EU, after the US and China. Over 70% of UK agricultural exports go to the EU, where it is easier and cheaper to get them fresh to market. By any calculation, the trade strategy for Global Britain has to start with Europe and America

To be more than an optimistic slogan, Global Britain needs to rest on a clear, evidence based strategy. And once we have the strategy, we will need a consistent plan to deliver it…

[Our] strategy should not be opportunistic or reactive, but based in principles. Brexit makes it even more important for the UK to have an international trade system with rules ensuring non-discrimination, fair competition and enforcement. Alone, we will be less equipped to cope in a trade environment driven by the bilateral and power based instincts of the new US administration and China, or indeed the sheer trading weight of the future EU. That is why we should remain a strong supporter of the WTO, and resist any temptation to short-circuit rules to score quick successes…

The Government has decided to prioritise other goals over our economic relations with the EU. This is fine, provided either people are prepared to pay the price in more expensive goods, less inward investment and lower growth, or we can quite rapidly find compensating alternative markets. There is also a risk, if the Article 50 exit negotiation does not go smoothly, that our future trade relationship will be negotiated not from the starting point of the status quo–integrated membership of a common market and regulatory space – but from outside, almost like any other third country. We should do our utmost to minimise this risk by avoiding gratuitous political friction and prioritising a smooth transition to new arrangements.’ The Tacitus Lecture 2017 – ‘The World is Our Oyster? Britain’s Future Trade Relationships’ delivered by Sir Simon Fraser.

Charles Grant, director of the Centre for European Reform, in his article ‘The Brexit negotiations: the UK government will have incentives to compromise’ published in the CER Insight, warned that,

6 sets of negotiations

‘[the] Brexit negotiations will take much longer and be far more complicated than many British politicians realise. One set of talks will cover Britain’s legal separation from the EU, the second a free trade agreement (FTA) with the EU, the third interim cover for the UK between its departure from the EU and the entry into force of the FTA, the fourth accession to full membership of the WTO, the fifth new FTAs to replace those that currently link the EU and 53 other countries, and the sixth co-operation on foreign, defence and security policies. [There is also a seventh ‘global’ dimension].

The divorce settlement

The first deal, the divorce settlement prescribed by Article 50 of the Treaty on European Union, will divide up the properties, institutions and pension rights, and deal with budget payments. It will also cover the rights of UK citizens in the EU and vice versa. The treaty sets out a two-year period for this negotiation, extendable by unanimity. The 27 want Britain out before the June 2019 European elections, and before talks on the EU’s next seven-year budget cycle get underway (the current cycle ends in 2020), so will not extend the two years. Article 50 was designed to put the departing country at a disadvantage: once the two-year clock starts ticking it is under pressure to strike a bargain, lest it leave the EU without the protection of any new legal framework.

FTA with the EU

The second deal will be some sort of FTA, probably similar in scope to that recently negotiated by Canada and the EU. The much-discussed ‘Norwegian model’ is not viable: Norway, as part of the European Economic Area (EEA), participates in the single market, but pays into the EU budget and has to accept free movement. The latter condition, and perhaps the former, would be unacceptable to the British Parliament. Although most MPs supported Remain, many of them now believe that the referendum result means that free movement must be restricted.

But even a Canadian-style FTA will require the British government to make painful trade-offs. The FTA may well eliminate tariffs on manufactured goods – but only if the UK agrees to comply with EU environmental, social and health and safety rules; otherwise the 27 would worry about unfair competition or ‘dumping’ by British firms. The UK’s FTA, like that of Canada, will probably provide only limited access to the single market for services. In return for deeper access, the 27 would ask the UK to accept free movement, budget contributions and the relevant EU rules. Therefore UK-based financial firms will almost certainly lose the ‘passporting’ that currently enables them to do business across the EU whilst being UK-regulated. Other industries would suffer, too, such as tourism, accountancy, law, air transport, freight and shipping. Like Canadian firms, British ones would probably have limited access to European public procurement markets, and vice versa, to the detriment of taxpayers on both sides. As a general principle, the UK will gain fuller access to European markets to the extent that it retains existing EU regulations and directives.

Both the European Commission and Donald Tusk, the president of the European Council, have said that work on the FTA should not start until the UK has left the EU. Perhaps they worry that if the UK negotiates on trade while still an EU member, it will be a more awkward customer. But their hard line would extend the period of uncertainty afflicting the UK economy. Many member-states, including Germany, suggest that the UK be allowed to work on the FTA at the same time as the divorce settlement. That softer line will probably prevail, but in any case the FTA will take many more years to negotiate and ratify than the Article 50 deal (which does not require ratification by the member-states); the EU-Canada FTA took seven years to negotiate and may take many more years to ratify in national parliaments. So there will be a period of several years between Britain leaving the EU and the FTA coming into effect.

Interim deal

That gap requires a third negotiation, for an interim deal. Without such a deal, British companies would face great uncertainty and depend on WTO rules – which set maximum levels for tariffs – to prevent unfair decisions or practices by EU countries. One possible interim solution, floated by the eurosceptic MEP Daniel Hannan, would be for the UK to become an EEA country for a limited period, while it works on the FTA (technically, the UK would have to join EFTA, the European Free Trade Association, in order to make EEA membership work). But ardent British eurosceptics might jib at the price of EEA membership – substantial budget payments, free movement of labour, most of the EU’s single market rules and judgements by the EFTA court. Furthermore, the existing EEA countries (Iceland and Liechtenstein, in addition to Norway) show little desire to reconstruct their own treaties and institutions to accommodate temporary British visitors. [Norway have also indicated they would block UK membership of the European Free Trade Association because through EFTA it has signed trade agreements with 38 countries including Mexico, Canada, Colombia, Morocco, Kuwait and Qatar, which if the UK joined, might have to be renegotiated and future trade deals would become more complex].

So there will probably be a bespoke interim deal to provide temporary cover to the British economy. Anand Menon and Damian Chalmers have suggested one possible model in a paper for Open Europe. Britain would be able to repeal EU laws and shun European Court of Justice rulings, but face the prospect of countermeasures from the EU. Menon and Chalmers would limit free movement to those with job offers, and exclude families of EU migrants unless the wage-earner’s income passed a certain level. Britain would stop paying into the EU budget but make direct payments to poorer member-states. Some of the 27 would consider this scheme too soft on the British: they do not want the process of exit to be seen to be pain-free, lest others try it. There will certainly be much haggling over the terms of the interim deal, which will, among other things, phase out Britain’s participation in EU policies and programmes.

Regularising the UK’s WTO scheduled commitments

The fourth deal that [the Prime Minister] needs to strike is [to regularise the UK’s scheduled commitments as an independent member of the WTO].

Britain is currently a member via the EU. Full members must deposit ‘schedules’ of tariffs, quotas, subsidies and other concessions on market access with the WTO. The UK will have to negotiate its own schedules, initially with the other 27. The tariff negotiation could be simple, if the British followed what the EU currently does. But dividing up quotas, on say New Zealand lamb imports, would be more complicated. And then the new British schedules would need the approval of all 163 WTO members, since the organisation’s decisions require consensus. So if one member (for example, Argentina or Russia) wanted to create difficulties, it could block the British schedules. British officials hope that such difficulties do not arise, but reckon that it will be hard work to sort out WTO membership within the two years of the Article 50 negotiation.

[In his article, ‘Nothing simple about UK regaining WTO status post-Brexit’ (published on the ICTSD website 27.06.2016) Peter Ungphakhorn wrote, ‘A common assumption in the June 23 referendum debate is that after leaving the EU, the UK could “simply” operate as an ordinary WTO member. Eventually that’s true, but getting there would be far from simple. Some experts believe that the adjustments would be little more than technical, and that any negotiations would be straightforward. They could be right. It would depend on whether the WTO’s membership is determined to accommodate the UK’s wishes. But recent experience in the WTO suggests that is unlikely. A closer look at the details suggests some key issues could be politically contentious among the WTO’s members, currently 162 countries. On top of that, recent negotiating experience suggests that willingness to accommodate each other’s interests quickly is a scarce commodity in the WTO and even a final agreement cannot be guaranteed. If that is true, then post-Brexit, the UK can expect a long and rough ride. To be clear, these negotiations would be about sorting out the UK’s legal status quo in the WTO. They would be separate from any free trade agreement such as with the US, EU or anyone else, although the complicated web of talks would feed into each other. The UK is already a WTO member, but its membership terms are bundled with the EU’s. Re-establishing the UK’s WTO status in its own right means both the UK and the EU would negotiate simultaneously with the rest of the WTO’s members to extract their separate membership terms. Agreement on the UK’s terms is unlikely before those of the EU. For its part, the UK would have to negotiate with the EU itself, the US, China, Russia, India, Brazil, and any trading nation or group of nations that matters, large or small, rich or poor. It would only take one objection to hold up the talks because the WTO operates by consensus, not voting, one reason why WTO negotiations take so long. The UK government would have to balance conflicting interests domestically as well.’]

[In a 22 page paper ‘The UK’s status in the WTO after Brexit’ (23 September 2016) Professor Lorand Bartels argues, ‘It has become conventional wisdom that once the UK leaves the EU it will have to renegotiate core aspects of its WTO rights and obligations, and in particular its concessions under Article II of the GATT 1994 and Article XX of the GATS. A leading exponent of this view is WTO Director-General Azevêdo, who said during the Brexit referendum campaign that ‘[the UK] will be a member with no country-specific commitments’. For some, rather dramatically, the UK will, at least de facto, be in the position of a country seeking to accede to the WTO from scratch, and that it will have to negotiate its terms of membership with all other WTO Members who will hold a veto over the outcome of these negotiations. At a minimum, others have said, the UK will have to negotiate its share of the EU’s commitment not to subsidise agricultural production above a certain level as well as its share of current EU preferential tariff rate quotas for certain agricultural products.  In addition, doubts have been expressed as to the UK’s rights to access the tariff rate quotas that other WTO Members have committed to allocate to the EU, and it is generally taken for granted that the UK would have to accede as a new party to the plurilateral WTO Government Procurement Agreement (GPA 2014), to which the EU – but not the UK – is a party, even though this agreement covers UK public bodies… [These] views are mistaken[In] substance, the position of the UK within the WTO after Brexit can, if the UK wishes, be the same as it is today. There may be certain statistical and political difficulties in setting the legal position of the UK within the WTO. But there do not appear to be any that are legal.’]

[In his article ‘Understanding the UK’s position in the WTO after Brexit (Part II – The consequences)’ (published on the ICTSD website 26.09.2016) Professor Lorand Bartels wrote, ‘The UK has independent rights and obligations as a WTO member, including those relating to the GATT 1994 and GATS concessions and commitments set out in the schedules that it shares with the EU and the other EU member states. It is difficult to identify the UK’s obligations in relation to EU-wide commitments that are expressed in quantified form. But ultimately this is an interpretive question which could end up in dispute settlement proceedings. It is therefore suggested that the UK take the initiative, and design new schedules that are clearly liberalising on these points. It is also suggested that the UK submit these schedules as a rectification or, to avoid unnecessary dispute, as a combination of rectification and modification, for certification by the WTO Director-General. This is of course highly likely to involve negotiations with other WTO members. That is the nature of the WTO, and it is also desirable to reach agreement on points on which the law is unclear. But in any such negotiations the UK should have a strong hand, provided it does not propose to increase protection, not the weak hand that others seem to think it has. Certainly one can discard, as legally incorrect, the notion that the UK is somehow a WTO member without scheduled commitments, and that its position in the WTO somehow depends on the good graces of other WTO members.’]

[‘…Brexiteers argue that, out of the EU’s clutches, Britain will be the WTO’s star pupil, striking trade deals across the world…However, there is a snag. Britain is already a member of the WTO, but operates through the EU. To become a fully independent member, Britain needs to have its own “schedules”, WTO- speak for the list of tariffs and quotas that it would apply to other countries’ products… The most simple course… [is] for Britain to keep its schedules as they are under the EU, including the “common external tariff” applied uniformly by EU members to imports from third countries. The government has recently hinted as much. This avoids diplomatic wrangling. But simply to readopt EU-approved commitments hardly looks like “taking back control”. It would also lead to other problems… If Britain kept the common external tariff in place then it might also apply to a company moving components between the EU and Britain. Such a firm could incur tariff charges each time a border is crossed. A WTO member might kick up a fuss if, say, one of its car companies with production facilities in both Britain and the EU suddenly found it more expensive to assemble a model. A related problem concerns the WTO’s “tariff-rate quotas” (TRQ’s). These allow a certain amount of a good to enter at a cheaper tariff rate. The EU has almost 100 of them…this is likely to become the most contentious issue in Britain’s re-establishment of its status as an independent WTO member… Some of these problems are surmountable…countries that stay in others’ good books find things easier. But so far, British politicians are also struggling on that front. Boris Johnson, the foreign secretary, has irritated his counterparts with clownish comments… When the reality of Brexit dawns, Mr Johnson and his fellow Brexiteers will find no trade deal to be especially appetising.’ The “WTO option” for Brexit is far from straightforward (The Economist 07.01.2017): http://www.economist.com/news/finance/21713818-becoming-independent-member-wto-could-be-difficult-process

‘One of the most important questions for UK businesses and investors is whether the UK could trade under WTO rules as soon as it exits the EU. In my opinion the answer is twofold. First, the UK would most likely lose market access on goods in certain countries and face legal challenges by some WTO members unless it negotiates with both the EU and the WTO members its status as an independent member of the WTO. Second, in relation to the UK – EU trade relationship, if there is no FTA  in place on the date the UK exits the EU, it is highly likely that both sides will treat each other on WTO terms (including MFN tariff rates). Due to the EU’s current trade restrictions to third countries, this is not a desirable outcome for either side…The current EU schedule of commitments is the so-called “EU-15” of 2012. The fact that this is an outdated schedule is likely to complicate matters in the UK’s future WTO negotiation because the EU schedule of concessions and commitments regarding agricultural products, domestic support and export subsidies does not reflect the enlargement of the EU (from 15 to 28 Member States). This means that the UK – EU allocation of commitments will likely lead to a series of requests by third countries seeking new compensation from the EU and the UK. How will third countries react to the UK-EU distribution of concessions is anybody’s guess. But at least one can expect the following: it is highly unlikely that WTO members will challenge the UK’s rights, concessions or commitments on industrial goods, export subsidies entitlements including those on agricultural exports or its schedule of services. The challenge, however, is likely to focus on the EU’s agricultural commitments related to tariff rate quotas (TRQ’s) to third countries such as Australia, Argentina, Brazil, China, New Zealand, Thailand, Uruguay and the U.S. TRQ’s are volumes that can be imported with a low or zero tariff. Imports above the quota quantity enter with a higher tariff rate. The UK and the EU would need to negotiate a distribution of the EU’s TRQ’s. This would be problematic to third countries. They may find the redistribution of the EU’s TRQ’s as unfair because it would reduce their access to the EU market as a result of the UK’s exit. The TRQ’s are likely to become the most contentious issue in the UK’s re-establishment of its legal status as an independent member of the WTO. Now let us assume that the UK is unable to agree on new commitments with other WTO members on the day it exits the EU…In the case of UK exports to WTO markets including the EU (in case there is no trade agreement in place yet), one would expect WTO members (including the EU) to apply MFN rates to UK products. But this raises doubts as to whether the UK can trade under MFN tariffs without having to make any concessions or commitments to WTO members. Because the UK would be trading on MFN without being forced to grant concessions and TRQ’s to the rest of the WTO members and, thus, creating an unfair scenario for the other WTO members, it is possible that the UK may be subject to MFN restrictions by other WTO members until it regularises its legal status which can only occur once it has negotiated a new schedule of commitments.

An additional uncertainty, in this case a legal one, is the legal process under the WTO rules to re-establish the UK as an independent member of the WTO, in particular with regard to the distribution of commitments. There is no provision in the WTO framework which covers the particular situation of the UK. The closest provision seems to be Article 28 of GATT which provides for the modification of schedules. Whether this provision applies to the particular case of the UK is not entirely clear. Despite these complexities, WTO members could allow the UK to trade under WTO rules on an interim basis (one or two years) without a schedule of commitments while it concludes the negotiations with all individual WTO members.

Having said all the above, it must be stressed that nothing prevents the UK negotiation in the WTO from being simple and straightforward. This will depend entirely on the political will of the WTO members on whether they want to make the UK’s life outside the EU easy or complicated.’] Brexit: Challenges for the UK in negotiating an FTA with the EU (a trade negotiator’s perspective) by Luis González García (02.08.2016): https://www.matrixlaw.co.uk/resource/brexit-challenges-uk-negotiating-fta-eu-trade-negotiators-perspective-luis-gonzalez-garcia/

Agreements with countries that have FTA’s with the EU

The fifth negotiation concerns the series of deals that must be struck with the countries that have FTAs with the EU. By some counts there are 53 such countries, including Algeria, Singapore, Israel, Vietnam, South Korea and Mexico. During the referendum campaign, some Leavers claimed that the 1969 Vienna Convention on the Law of Treaties means that, post-Brexit, the UK will still benefit from these FTAs. But that does not work legally: the day that Britain leaves the EU, the FTAs cease to apply to it. The UK will have to scramble to cut its own bilateral deals with these countries, before it exits the EU. Most of the 53 will probably do their best to be helpful. But some may be difficult, perhaps because they have particular industries that face competition from the UK.

This work on bilateral FTAs will keep Britain’s embryonic Ministry of International Trade busy. At the time of the referendum, the British government employed no more than (by its own count) 12 to 20 trade negotiators. It is now hurrying to recruit many hundreds more, from friendly countries and the private sector. If one listens to the rhetoric of some Conservative ministers, Britain will soon be striking bilateral trade deals with dozens of states with which the EU has not yet completed FTAs – such as the US, China, India, Australia and New Zealand.

But this is highly unlikely, for legal and practical reasons. So long as the UK is part of the EU, it cannot legally complete an FTA with another country. It can talk about talks. But given that its current capacity for trade negotiations is limited, its priority will have to be salvaging the bilateral deals with the 53 countries that it risks losing, as well as forging the big FTA that it needs with the EU.

In any case, countries like the US, New Zealand or China will simply not want to negotiate an FTA with the UK until they know what Britain’s relationship with the EU is likely to be. Which bits of the single market, if any, will the UK be in? Which parts of EU competition law will apply to the UK? Once Britain has left the EU’s customs union, what ‘rules of origin’ will Brussels apply, so that other countries cannot use the UK as a way of circumventing EU restrictions on their exports? Would regulatory harmonisation between the EU and the UK make convergence between the UK and other countries impossible?

On July 25th Michael Froman, the US Trade Representative, said that “as a practical matter, it is not possible to meaningfully advance separate trade and investment negotiations with the UK until some of the basic issues around the future EU-UK relationship have been worked out.” But as Jack Schickler has written for InFacts, “the terms of our EU deal may not be certain till the end of the process”. In any case, Britain’s partners will not want to deal with it until it is a full member of the WTO. The New Zealand government is one that has said it does not want to broach an FTA until the UK has sorted out its relationship with the WTO.

‘If the BRICS [Brazil, Russia, India, South Africa and China] are a high priority, but not a panacea, so is the Commonwealth. I do not subscribe to the view that the Commonwealth offers an equivalent vehicle to the EU for projecting UK influence in the world, but we should definitely be looking to strengthen Commonwealth trade and other links. Australia and New Zealand are keen for trade deals. The problem is that between them they account for less than 2% of our exports. When Australia made an FTA with the US, their trade grew about 70% over a decade, but academics suggest much of this was diversion of trade from other Australian partners. For the UK, early FTAs with Australia and New Zealand are desirable in political terms, but secondary in economic terms. Should they be a priority for deploying limited trade negotiating resources?

Another little remarked fact is that thirty – two Commonwealth countries, mainly in Africa and the Caribbean, are covered by EU FTAs or have tariff free access to our markets. This raises two issues. First, until we negotiate new agreements with them we risk being in the odd position of having worse trading terms with these Commonwealth countries than the EU. Second, these EU trade agreements are vital for their development goals. The UK will no longer be able to champion their access to the EU market as we have in the past. We have a moral responsibility to address the concerns of these countries, which illustrate how Brexit may have unforeseen repercussions well beyond Europe.’ Sir Simon Frazer, The Tacitus Lecture 2017 – The World is Our Oyster? Britain’s Future Trade Relationships.

Foreign, Defence, Police, Judicial, and Counter-Terrorism Co-operation

The sixth negotiation will cover UK-EU ties in areas like foreign and defence policy, police and judicial co-operation and counter-terrorism. As I have written elsewhere, on these dossiers the UK is in a relatively strong position. It has important diplomatic, intelligence and military assets that can be useful to its partners. The British are likely to ask for mechanisms that allow them to feed their knowledge and expertise into EU deliberations – similar to those which the US already has with the European External Action Service, or Norway with Europol. At the moment several of the 27 oppose giving the UK formal links to EU foreign policy-making machinery, as opposed to informal channels, though that may change when emotions subside. There would be a mutual self-interest in creating consultation mechanisms – though the UK must accept that it will have much less influence on EU policy-making than it has today.

At least one senior figure in May’s government has floated the idea of linking the security dossiers with the EU-UK trade agreement. The suggestion is that, because Britain has just strengthened its commitment to the defence of the Baltic states and Poland (supplying a battalion of troops), these countries should work hard to secure a good trade deal for the UK. It is perfectly legitimate for the British to hope that their security policies generate goodwill. But if they imply that they are defending Eastern Europe in order to engineer a better FTA, rather than because they care about democracy and deterring bullying by Russia, they will rapidly lose credibility in the region.

In order to reach outcomes that are half-decent from a British point of view, Theresa May’s government needs to earn the goodwill of her 27 EU partners, and the EU institutions – including the European Parliament, which must vote on both the Article 50 divorce settlement and the FTA. But her ministers will also need to charm many other governments across the world, if they want the WTO talks and the FTA negotiations with non-EU countries to run smoothly. Hopefully, the three leading Brexiteer ministers – David Davis, Liam Fox and Boris Johnson – will understand the point. If they resort to thumping the table and threatening other governments, they will delay the deals they need. The longer the British government takes to complete these many negotiations, the worse the uncertainty for the British economy. So May’s government will have incentives to compromise.’

Oliver Patel of the ‘Constitution Unit’ in the Department of Political Science at University College London (the UK’s leading research body on constitutional change) further explained on ‘The ‘Constitution Unit’ website back in May,

‘Another implication of Brexit is that, from the moment of withdrawal, the UK would no longer be party to the free trade agreements which the EU has signed with other countries. The EU currently has free trade agreements with 58 countries with many more (such as TTIP and an agreement with Japan) in the pipeline. Together, these agreements cover about 35 per cent of world trade.

Presumably the UK government would want to negotiate free trade agreements with a range of countries because at the moment of withdrawal the UK would not have preferential access to any markets. Of course, the freedom to negotiate trade deals with countries all over the world is one of the key reasons why people argue for Brexit. However, it is sure to be a massive practical challenge for Whitehall, not least due to the simultaneous EU withdrawal negotiations which are bound to dominate. At our seminar, Sir Simon Fraser candidly remarked that ‘those who say that negotiating these agreements will be simple clearly have no experience of doing such deals’.

28 months is the average length of time it takes to negotiate a free trade agreement. It is true that the UK might be able to strike deals with countries quicker than the EU can. The US and Australia, for example, took about two years to negotiate and finalise their free trade agreement. Switzerland, which has negotiated deals with leading economies such as China, Japan, South Korea and Canada, is sometimes used as an example of how the UK can flourish post-Brexit. However, it is important to note that it has taken Switzerland many years to finalise these deals and that they were not all done simultaneously.

The UK will have to negotiate multiple deals simultaneously in order to prevent a long-term hit to the economy. At the very least, the government will need to hire hundreds (if not thousands) of experienced trade negotiators, consultants and other experts, who will be able to contribute to this process. No one is suggesting that the UK cannot do it alone, but it will not be easy.’

Therefore key milestones in the UK Government’s Brexit road-map would appear to include negotiating:

  • Britain’s legal separation from the EU;
  • a FTA with the EU;
  • interim cover for the UK between its departure from the EU and the entry into force of the FTA;
  • the UK’s WTO Scheduled Commitments;
  • FTAs to replace those that currently link the EU and 53 other countries; and
  • co-operation on foreign, defence and security policies with the EU.

FTA’s with countries who do not have agreements with the EU – the rest of the world

There is also a seventh ‘global’ dimension.

A European Commission Memo published 3 December 2013 states, ‘According to IMF estimates, over the next years, 90% of world demand will be generated outside the EU. That is why it is a key priority for the EU to open up more market opportunities for European business by negotiating new Free Trade Agreements with key countries.’

Post-Brexit, Britain will therefore be in a race to enter into FTA’s with many of the same countries.

The EU currently has existing PTA’s with 52 countries, and it is negotiating trade agreements with another 72 countries. In case of Brexit, the UK would therefore need to re-negotiate or start new bilateral negotiations on 124 trade agreements, plus one additional trade agreement re-defining its own trade status as a third country vis-à-vis the EU. If we limit the focus to the top-50 trade partners of the UK, who account for 92% of all UK trade, 41 of them do have some trade agreements or ongoing negotiations with the EU. 18 of the UK’s top 50 trade partners are EU countries, one (Norway) is an EEA country, one (Turkey) has a customs union agreement with the EU, eight countries have existing EU PTAs in place and 13 countries are currently negotiating EU trade agreements. This would translate into a minimum of 24 negotiations to be concluded.’ Leaving the EU would mean renegotiating more than 100 trade agreements by Pia Hüttl and Silvia Merler (LSE ‘Brexit’ website page March 2016).

EU’s approach to the BREXIT negotiations 

The European Council (Art. 50) draft guidelines following the United Kingdom’s notification under Article 50 TEU (31.03.2017) state,

‘In these negotiations the Union will act as one. It will be constructive throughout and will strive to find an agreement. This is in the best interest of both sides. The Union will work hard to achieve that outcome, but it will prepare itself to be able to handle the situation also if the negotiations were to fail. 

These guidelines define the framework for negotiations under Article 50 TEU and set out the overall positions and principles that the Union will pursue throughout the negotiation. The European Council will remain permanently seized of the matter, and will update these guidelines in the course of the negotiations as necessary… 

The European Council will continue to base itself on the principles set out in the statement of Heads of State or Government and of the Presidents of the European Council and the European Commission on 29 June 2016… 

Preserving the integrity of the Single Market excludes participation based on a sector by sector approach. A non-member of the Union, that does not live up to the same obligations as a member, cannot have the same rights and enjoy the same benefits as a member. In this context, the European Council welcomes the recognition by the British Government that the four freedoms of the Single Market are indivisible and that there can be no “cherry picking”… 

Negotiations under Article 50 TEU will be conducted as a single package. In accordance with the principle that nothing is agreed until everything is agreed, individual items cannot be settled separately. The Union will approach the negotiations with unified positions, and will engage with the United Kingdom exclusively through the channels set out in these guidelines and in the negotiating directives. So as not to undercut the position of the Union, there will be no separate negotiations between individual Member States and the United Kingdom on matters pertaining to the withdrawal of the United Kingdom from the Union… 

While an agreement on a future relationship between the Union and the United Kingdom as such can only be concluded once the United Kingdom has become a third country, Article 50 TEU requires to take account of the framework for its future relationship with the Union in the arrangements for withdrawal. To this end, an overall understanding on the framework for the future relationship could be identified during a second phase of the negotiations under Article 50. The Union and its Member States stand ready to engage in preliminary and preparatory discussions to this end in the context of negotiations under Article 50 TEU, as soon as sufficient progress has been made in the first phase towards reaching a satisfactory agreement on the arrangements for an orderly withdrawal… 

To the extent necessary and legally possible, the negotiations may also seek to determine transitional arrangements which are in the interest of the Union and, as appropriate, to provide for bridges towards the foreseeable framework for the future relationship. Any such transitional arrangements must be clearly defined, limited in time, and subject to effective enforcement mechanisms. Should a time limited prolongation of Union acquis be considered, this would require existing Union regulatory, budgetary, supervisory and enforcement instruments and structures to apply… 

The core principles set out above should apply equally to the negotiations on an orderly withdrawal, to any preliminary and preparatory discussions on the framework for a future relationship, and to any form of transitional arrangements… 

The two year timeframe set out in Article 50 TEU ends on 29 March 2019… 

The right for every EU citizen, and of his or her family members, to live, to work or to study in any EU Member State is a fundamental aspect of the European Union. Along with other rights provided under EU law, it has shaped the lives and choices of millions of people.

Agreeing reciprocal guarantees to settle the status and situations at the date of withdrawal of EU and UK citizens, and their families, affected by the United Kingdom’s withdrawal from the Union will be a matter of priority for the negotiations. Such guarantees must be enforceable and non-discriminatory… 

Also, the United Kingdom leaving the Union will impact EU businesses trading with and operating in the United Kingdom and UK businesses trading with and operating in the Union. Similarly, it may affect those who have entered into contracts and business arrangements or take part in EU – funded programmes based on the assumption of continued British EU membership. Negotiations should seek to prevent a legal vacuum once the Treatises cease to apply to the United Kingdom and, to the extent possible, address uncertainties… 

A single financial settlement should ensure that the Union and the United Kingdom both respect the obligations undertaken before the date of withdrawal. The settlement should cover all legal and budgetary commitments as well as liabilities, including contingent liabilities. 

The British government has indicated that it will not seek to remain in the single market, but would like to pursue an ambitious free trade agreement with the European Union. Based on the Union’s interests, the European Council stands ready to initiate work towards such an agreement, to be finalised and concluded once the United Kingdom is no longer a Member State

Any free trade agreement should be balanced, ambitious and wide-ranging. It cannot, however, amount to participation in the Single Market or parts thereof, as this would undermine its integrity and proper functioning. It must ensure a level playing field in terms of competition and state aid, and must encompass safeguards against unfair competitive advantages through, inter alia, fiscal, social and environmental dumping… 

The European Council endorses the arrangements set out in the statement of 27 Heads of State or Government on 15 December 2016 [“Procedural Arrangements For Negotiations Under Article 50”]…’ 

The economic dangers of political wishful thinking?

In theory 124 trade agreements x 5 years each = 620 years.

Hypothetically, all 124 could be negotiated within 5 years (if negotiated in parallel).

How many trade negotiators does the UK need to resource this?

‘The EU typically sends 20 commission negotiators to any round of trade talks, backed up by between 25 and 40 technical experts, she wrote in the FT earlier this year. The UK has 40 trade negotiators, compared with the 550-strong trade department in Brussels’: https://www.theguardian.com/business/2016/aug/17/brexit-trade-deals-gruelling-challenge-taking-back-control.

Assuming that each UK negotiating team will include at least around 25 negotiators (plus technical experts), 124 x 20 = 2,480 negotiators.

One former EU trade negotiator Miriam Gonzalez Durantez, estimated more precisely (17 August 2016) that for the progressive negotiation of priority agreements (i.e. not all 124) the UK would need an operational cadre of least 500 negotiators.

How many do we have?

‘Lord Price, the minister for trade and investment, has said that the Government has about 40 trade negotiators, compared with the 550 employed by the EU. Yet even these figures may exaggerate the number of people qualified to go into the room for Britain and agree trading deals for a post-EU era. Lee-Makiyama estimates that there cannot be more than 200 actual negotiators in the world as a whole. This shortfall will require the civil service to look far and wide, and is indicative of the kind of skills shortages Whitehall will struggle with in the years ahead. Dealmakers have to know what strategy they will use, if they will scope out the negotiation, what they will scope, and how they will do it. They must have an idea of what they want to propose, in what order, and which sections of a trade deal they want to debate first. Developing an understanding of how to do this can take years.

“Even the European Commission has been accused of not being able to draft” proper agreements, Lee-Makiyama says. “This is why all the European free trade agreements include language copied and pasted from the US agreements.”

Part of the arsenal of any good negotiator is a formidable contacts book. Given the small number working in this area, negotiators tend to know each other, and those personal relationships can be as important as their technical abilities. Homegrown British negotiators would lack the access of their more seasoned adversaries.’

Government faces worldwide hunt for trade negotiators, experts warn: http://www.telegraph.co.uk/business/2016/07/03/government-faces-worldwide-hunt-for-trade-negotiators-experts-wa/

‘“Serious multilateral negotiating experience is in short supply in Whitehall, and that is not the case in the Commission or in the Council,” [Sir Ivan] Rogers writes.

This is shaping up to be a one-sided affair. Brexit is a paradox, an effort to return to the past and a vision for the future at the same time. After nearly 45 years as a fully fledged member of the EU the UK wants out. And it has two years to cut a deal with the EU.

There is no mutually beneficial deal available between the UK and the EU in this time frame. Existing levels of trade and investment will not guarantee a positive outcome for the UK. The Brexiters who think they have the upper hand are wrong.

Then there are the more mundane aspects of international trade negotiations that evidently are not getting a hearing in Whitehall. I write from experience, having helped give birth to the Canada-EU Comprehensive Economic and Trade Agreement (Ceta).

Ceta is a very good agreement between two willing and flexible partners that approached negotiations with a positive spirit, seeking to realise the full potential of the relationship. It will stand the test of time once implemented. However, I certainly did not think that the scoping, negotiation and the ratification of the treaty would take more than 10 years. The politicisation of the European process of ratification has been most surprising and, at times, disconcerting. Rogers’s warning to Downing Street, outlining that the EU expects a full UK trade deal to take until the early to mid-2020s, seems a realistic timeframe. Undoing nearly 45 years of integration and shared law will not be a pleasant experience and represents a clear step backwards.

Why do these agreements take so long? The last generation of trade agreements was focused mainly on removing tariffs. Multilaterally, the single biggest recent event at the increasingly ineffectual World Trade Organisation has not been the conclusion of a successful round, but, rather, China’s accession in 2001. The next generation of bilateral agreements, of which Ceta is the template, is complex. They reflect the realities of modern commerce and go beyond trade, touching upon behind-the-border issues such as standards, regulation and opening government contracts to competitive bidding. This complexity means that the deals take years to negotiate and conclude. In our amped up media environment, there are special interests making noise at each step in the process, ensuring that trade and investment deals are a marathon, not a sprint.

The EU’s chief negotiator, Michel Barnier, has stated that the ratification process alone for a UK-EU deal would take six months. Based on the experience of Ceta it will certainly be longer.

An interim deal is surely now the target – but it seems impossible to achieve without UK flexibility on freedom of movement and the role of the European courts. This means that a reversion to WTO rules and the common tariff schedules is the most likely scenario for the UK. Estimates are that this will mean a 4% drop in UK GDP versus a 1% loss in the EU, due mainly to the relative sizes of their economies. While it would be diminished by the loss of one of its most dynamic members, the EU can take the hurt. It has no choice but to do so.

In addition to paving the way for similar deals across the Union which could lead to its fragmentation, a sweetheart deal with the UK would be a missed opportunity to extract industries back to the continent – banking, autos and aerospace to name a few. The Brexit camp seems to be divided into two groups – those who believe that an interim deal is possible and those who are not only resigned to a WTO outcome, but have actually convinced themselves that the UK will be as strong or stronger as a result. This view is held despite the higher tariffs, a loss of passporting rights for UK financial institutions and the disappearance of agricultural subsidies such an outcome will represent.’

As a trade negotiator, I’m shocked at Brexiters’ ignorance: https://www.theguardian.com/commentisfree/2017/jan/08/trade-negotiator-shocked-at-brexiters-ignorance

Are the UK’S plans so ambitious as to prove unrealistic?:

https://economic-research.credit-agricole.com/medias/Persp17_019_UK_Brexit_20170120_EN_r.pdf

In which case what are the dangers of political wishful thinking?

‘British Brexit negotiators risk signing trade deals that are damaging, politically-motivated and “unlikely to have many economic benefits”, according to the expert who is training the Government’s officials on negotiations.

Steve Woolcock, a professor at the London School of Economics, who leads the advanced trade negotiation course that has been attended by more than 60 officials from Liam Fox’s Department for International Trade, said the risk of rushing into politically motivated deals within two years of triggering Article 50 could damage British industry.

“The greatest danger in trade policy at the moment is that there’s a political imperative to conclude agreements with other countries to show that Brexit works,” Mr Woolcock told the Times.

“These are unlikely to have many economic benefits or enable the UK to keep up with other preferential trade agreements,” he added.

Mr Woolcock’s warning comes as Prime Minister Theresa May prepares to trigger Article 50 on Wednesday, officially kick-starting Britain’s two-year timeframe to negotiate its formal exit from the EU.

“At a political level there is still no recognition of the difficulties,” Mr Woolcock said, adding that the Brexit debate is currently far too focused on tarrifs.

“All the debate was about tariffs. But tariffs are a minor aspect of doing business internationally today,” he said.

“The problem is on regulatory issues. The UK has to negotiate some kind of arrangement that can help to continue to ensure that UK regulatory standards will still be seen as equivalent. Without that it’s too easy for the EU to simply say ‘no, that doesn’t apply anymore’.”’

Britain risks rushing into ‘politically-motivated’ trade deals ‘unlikely to have many economic benefits’ – The man training our politicians to negotiate Brexit, says that we risk missing the point: http://www.independent.co.uk/news/business/news/brexit-talks-negotiators-ukeu-trade-political-motivations-economy-benefits-deals-a7651741.html

Conclusions

  1. A trade agreement cannot be concluded and ratified before 29 March 2019. The draft EU Guidelines state, ‘the European Council stands ready to initiate work towards such an agreement, to be finalised and concluded once the United Kingdom is no longer a Member State.’
  2. To preserve the status quo for citizens and businesses on both sides of the Channel there will have to be a transitional agreement. The draft EU Guidelines state, ‘To the extent necessary and legally possible, the negotiations may also seek to determine transitional arrangements which are in the interest of the Union and, as appropriate, to provide for bridges towards the foreseeable framework for the future relationship.’
  3. Unless carved out (i.e. by UK legislation), the rights of EU citizens living in the UK will remain uncertain until everything has been agreed. The draft EU Guidelines state, ‘In accordance with the principle that nothing is agreed until everything is agreed, individual items cannot be settled separately.’
  4. A specific trade regime e.g. for car manufacturers cannot be agreed. The draft EU Guidelines state, ‘Preserving the integrity of the Single Market excludes participation based on a sector by sector approach.’
  5. At the moment of withdrawal the UK will have no preferential access to any markets anywhere in the world. This includes the EU if a bespoke FTA has not been agreed and implemented, and the 52 countries who have trade agreements with the EU (‘ETAC’s), as these agreements shall cease to apply to the UK on the day of departure. Meanwhile the EU is currently negotiating trade agreements with another 72 countries. Post Brexit, the UK will therefore need to re-negotiate or start new bilateral negotiations on 124 trade agreements. However until a bespoke trade agreement or a transitional agreement has been concluded with the EU, no state with whom the UK wishes to negotiate a FTA can properly formulate a position upon the scope and terms of a future bilateral agreement, because the extent of the UK’s freedom to agree the scope and terms of a FTA, will be curtailed by the terms of a bespoke UK-EU trade agreement or transitional arrangement. In other words, the UK’s negotiating counter-parties cannot know the extent to which the UK’s hands will be tied by the EU when the UK is free, post Brexit, to enter into a legally binding FTA.

If a bespoke trade agreement is concluded and ratified at the end of a transitional period of e.g. 2 years (and the period may be longer), the earliest that a trade agreement with any other country could practicably be concluded would be in 2021.

The Peterson Institute for International Economics who analysed how long it took the US to agree 20 bilateral trade deals concluded: (i) one and a half years, on average, and (ii) more than three and a half years to get to the implementation stage. https://www.weforum.org/agenda/2016/07/how-long-do-trade-deals-take-after-brexit/

= 5 years.

It is therefore not inconceivable that the first trade agreement with a non-ETAC will be concluded and implemented sometime between 2024 and 2029/2030 (if e.g. the conclusion of a bespoke trade agreement with the EU takes e.g. 7 years from commencement of negotiations. Negotiations are unlikely to commence before October 2017 and the EU position appears to be that negotiations will only commence and take place in parallel if progress is made on the divorce settlement first, and crucially, the divorce bill.

7 years from 29 March 2017 is 29 March 2024. Add 5 years = 2029. Factor in delay in commencment = 2029/2030.

‘Former ambassador to the UK, Sir Ivan Rogers, told MPs that he had not spoken to a single senior EU official who believed that negotiations could be completed in time for Britain’s exit from the EU in 2019.

“The consensus wisdom among the technocracy around Brussels… is that Free Trade Agreements take a long time and with the best will in the world, it will not culminate by 2018,” Rogers said.

“My summary of the senior beltway wisdom of the people I spoke to on a daily basis was that it would probably take until the early to mid-2020s for ratification.”

“I have not found a single senior person in any of those organs who has diverged from that view.”

Rogers pointed to previous EU free trade negotiations which have taken up to seven years to complete and dismissed those who claimed it could be wrapped up in just two years.

“You do not, with the EU, negotiate something of that length and gravity in that length of time,” he said.

Britain is also set to be hit by a huge exit bill of around forty to sixty billion euros, EU officials told Rogers.

He told the European Scrutiny Committee that the consensus view in Brussels is that the UK would accept their demands due to the short two-year process allowed for negotiations under Article 50.

“I think the view from many will be that the implications for the UK of walking away without any deal on the economic side.. and walking into a WTO world, from their perspective [would] be so unpalatable that we won’t do it.”

“And that will oblige us to consider transitional arrangements which will bridge us to that deal”.’ The EU has told Britain that ‘humongous’ Brexit negotiations will take up to ten years: http://uk.businessinsider.com/eu-britain-brexit-negotiations-article-50-theresa-may-ivan-rogers-ten-years-2017-2

6.Regarding the stated default position of the UK trading under WTO rules, this is not as straightforward as politicians appear to think and say that it is.

European political timeline

Article 50 Triggered: 29 March 2017.

EU draft guidelines (drawn up by Donald Tusk, the European Council president) circulated to member state capitals for a month of discussions ahead of an EU summit on April 29 to finalise the language: 31 March 2017.

British local elections: 04 May 2017.

French Presidential election: 07 May 2017.

UK General Election: 08 June 2017.

German elections: 24 September 2017.

Snap Italian general election: ?

Planned end-date for Brexit negotiations to allow time for ratification: October 2018.

Britain exits EU on 29 March 2019.

‘These six elections are set to change Europe forever – Inspired by Donald Trump, the right, in all its varieties, is on the march. Here are the key election results to look out for in 2017’ (Independent 01.12.2016: http://www.independent.co.uk/voices/italian-referendum-french-presidential-election-german-election-european-union-europe-euro-change-a7449266.html)

Brexit news

Daily updates – Brexitcentral: http://brexitcentral.com

What you need to know (Linklaters 28 June 2016): http://www.linklaters.com/Insights/eu-referendum-microsite/Pages/Index.aspx

A lawyer’s View on Brexit (Allen & Overy) (February 2016): http://www.allenovery.com/SiteCollectionDocuments/A%20fresh%20view%20on%20Brexit.pdf

United Kingdom European Union membership referendum, 2016: https://en.wikipedia.org/wiki/United_Kingdom_European_Union_membership_referendum,_2016

UK – EU referendum results: http://www.electoralcommission.org.uk/find-information-by-subject/elections-and-referendums/past-elections-and-referendums/eu-referendum/electorate-and-count-information

The leave campaign is a revolution, and like all revolutions, it will eat its own: https://www.theguardian.com/books/2016/jul/01/david-hare-on-brexit-its-a-revolution-like-all-revolutions-own

What the American revolution can teach us about Brexit: https://www.theguardian.com/commentisfree/2016/jun/28/brexit-parallels-american-revolution-lessons-xenophobia

Pitfalls of the Brexit Revolution – Will Britain’s revolutionary vote to leave the EU end up transforming Europe like 1789, or preserving the old regime, like 1848?: http://www.wsj.com/articles/pitfalls-of-the-brexit-revolution-1467935174

Brexit Law  – The way ahead (Allen & Overy): http://www.allenovery.com/Brexit-Law/Pages/default.aspx

Brexit – The path ahead (macroeconomic insights by Goldman Sachs): http://www.goldmansachs.com/our-thinking/macroeconomic-insights/brexit/index.html?cid=PS_01_54_07_00_01_16_01&mkwid=WGxvvQwT

Farmers who backed Leave now regret vote over subsidy fears: http://www.independent.co.uk/news/uk/farmers-brexit-regret-bregret-funding-common-agricultural-policy-a7163996.html

The Bank of England’s response to Brexit: https://next.ft.com/content/e937879a-5282-11e6-befd-2fc0c26b3c60

The implications of Brexit for the Bank of England: http://www.economist.com/news/britain/21701260-britain-faces-months-economic-uncertainty-implications-brexit-bank-england

Bank of England prepares to tackle Brexit hit: http://uk.reuters.com/article/uk-global-economy-weekahead-idUKKCN1091U9

Awkward moment German journalist asks Theresa May why she appointed Boris Johnson Foreign Secretary: http://www.telegraph.co.uk/news/2016/07/20/awkward-moment-german-journalist-asks-theresa-may-why-she-appoin/

Brexit minister David Davis says EU nationals could be deported retrospectively: http://www.independent.co.uk/news/uk/politics/scotland-cant-have-veto-over-any-brexit-deal-insists-david-davis-a7141461.html

Don’t dive into a pre-packaged Brexit trade deal, Prime Minister. We can do better: http://www.telegraph.co.uk/business/2016/07/28/dont-dive-into-a-pre-packaged-brexit-trade-deal-prime-minister-w/

Five models for post-Brexit UK trade: http://www.bbc.co.uk/news/uk-politics-eu-referendum-36639261

Is the Swiss model a Brexit solution?: http://ukandeu.ac.uk/is-the-swiss-model-a-brexit-solution/

Four reasons a post-Brexit UK can’t copy Norway or Switzerland: http://www.telegraph.co.uk/business/2016/06/10/three-reasons-a-post-brexit-uk-cant-copy-norway-or-switzerland/

Canada’s trade deal with EU a model for Brexit? Not quite, insiders say: https://www.theguardian.com/world/2016/aug/15/brexit-canada-trade-deal-eu-model-next-steps

Britain ‘scoping’ free trade deals in time to leave EU in January 2019: http://www.standard.co.uk/news/politics/brexit-britain-scoping-free-trade-deals-in-time-to-leave-eu-in-january-2019-a3297621.html

Brexit essentials: Alternatives to EU membership –Slaughter & May Briefing May 2016: https://www.slaughterandmay.com/media/2535258/brexit-essentials-alternatives-to-eu-membership.pdf

Brexit and International Trade Treaties: http://www.lawyersforbritain.org/brexit-trade-treaties.shtml

Brexit and International Trade Treaties: a complex, long, and expensive process: http://lawyers-inforbritain.uk/briefings/brexit-and-international-trade-treaties-a-complex-long-and-expensive-process/

Brexit must happen before we will consider trade deal with UK, US says: http://www.independent.co.uk/news/business/news/brexit-must-happen-before-we-will-consider-trade-deal-with-uk-us-says-a7158611.html

BREXIT: the impact on the UK and the EU: https://www.global-counsel.co.uk/sites/default/files/special-reports/downloads/Global%20Counsel_Impact_of_Brexit.pdf

Brexit: The Reality – Dr Robin Niblett CMG (Chatham House): https://www.chathamhouse.org/expert/comment/brexit-reality

Brexit talks must be completed before US will agree UK trade deal, John Kerry tells Boris Johnson: http://www.independent.co.uk/news/business/news/brexit-john-kerry-boris-johnson-us-uk-trade-deal-eu-referendum-a7146406.html

Brexit trade deals: the gruelling challenge of taking back control: https://www.theguardian.com/business/2016/aug/17/brexit-trade-deals-gruelling-challenge-taking-back-control

Brexit and EU-UK trade relations with third states: http://eulawanalysis.blogspot.co.uk/2016/03/brexit-and-eu-uk-trade-relations-with.html

Brexit leaves free trade deal with EU in limbo – The U.K. vote on leaving the EU casts doubt on free trade deals between Canada and Europe: https://www.thestar.com/business/2016/06/24/brexit-leaves-free-trade-deal-with-eu-in-limbo.html

Brexit voters ‘misinformed’ on Swiss relations with EU: http://www.thelocal.ch/20160628/brexit-voters-misinformed-over-swiss-relations-with-eu

You should read Japan’s Brexit note to Britain — it’s brutal: http://uk.businessinsider.com/japan-brexit-note-to-britain-2016-9

Who is David Davis? A profile of Britain’s new ‘Brexit Secretary’: http://www.telegraph.co.uk/news/0/who-is-david-davis-a-profile-of-britains-new-minister-for-brexit/

Theresa May mulls new restrictions for foreign student visas: http://www.theweek.co.uk/60665/theresa-mays-first-pmqs-a-thatcheresque-performance

The Brexit Hangover Just Got Worse: http://www.vanityfair.com/news/2016/08/the-brexit-hangover-just-got-worse

There’s a huge sign of a looming Brexit jobs disaster: http://www.independent.co.uk/news/uk/theres-a-huge-sign-of-a-looming-brexit-jobs-disaster-a7185686.html

Will US firms pull back in London after Brexit?: http://www.legalweek.com/sites/legalweek/2016/06/27/will-us-firms-pull-back-in-london-after-brexit/?slreturn=20160823051625

Brexit pain will last for years, says Hong Kong’s richest man Li Ka-shing: http://www.independent.co.uk/news/business/news/brexit-pain-will-last-for-years-says-hong-kongs-richest-man-li-ka-shing-a7185581.html

EU considers migration ‘emergency brake’ for UK for up to seven years: https://www.theguardian.com/world/2016/jul/24/brexit-deal-free-movement-exemption-seven-years

After Brexit, a game plan for the EU: unleash Project Pain: https://www.theguardian.com/commentisfree/2016/jul/24/eu-britain-must-suffer-for-brexit

Whether leavers like it or not, Europe has a say on how Brexit will happen: https://www.theguardian.com/commentisfree/2016/aug/10/europe-brexit-negotiations-eu-leave

Pound slips, but FTSE hits 14 month high and oil jumps after Saudi comments – as it happened (11 August 2016): https://www.theguardian.com/business/live/2016/aug/11/uk-house-prices-brexit-vote-bond-yields-business-live

Finally Labour seems to care about the absence of a post-Brexit plan: http://www.theguardian.com/politics/2016/aug/12/labour-post-brexit-plan-john-mcdonnell

The Observer view on post-Brexit Britain’s position in the world: https://www.theguardian.com/commentisfree/2016/aug/13/observer-view-post-brexit-britain-trading-vulnerability

Brexit weekly briefing: economy takes centre stage as politics stalls (9 August): http://www.theguardian.com/politics/2016/aug/09/brexit-weekly-briefing-banks-stimulus-comes-too-soon-for-some

Treasury to guarantee post-Brexit funding for EU-backed projects: http://www.theguardian.com/politics/2016/aug/13/philip-hammond-treasury-to-guarantee-post-brexit-funding-for-eu-backed-projects

How to stop Brexit: get your MP to vote it down: https://www.theguardian.com/commentisfree/2016/jun/27/stop-brexit-mp-vote-referendum-members-parliament-act-europe

UK voted for Brexit – but is there a way back?: http://www.theguardian.com/politics/2016/jun/29/uk-voted-for-brexit-but-is-there-a-way-back

Iain Duncan Smith calls for Brexit talks to begin as soon as possible: http://www.theguardian.com/politics/2016/aug/21/iain-duncan-smith-brexit-talks-begin-as-soon-as-possible

Theresa May is already disagreeing with Liam Fox over Brexit – and there’s trouble for the Cabinet ahead: http://www.independent.co.uk/voices/brexit-eu-referendum-theresa-may-prime-minister-liam-fox-disagreement-trouble-cabinet-split-a7158596.html

Liam Fox tried to wrest control of Foreign Office duties from Boris Johnson: http://www.theguardian.com/politics/2016/aug/14/liam-fox-attempt-wrest-control-foreign-office-duties-boris-johnson

Liam Fox and Boris Johnson locked in feud over who controls Britain’s foreign policy: http://www.telegraph.co.uk/news/2016/08/13/liam-fox-and-boris-johnson-locked-in-feud-over-who-controls-brit/

Bitter Cabinet feud between Boris and Fox as trade secretary tells Theresa May to break up the Foreign Office: http://www.dailymail.co.uk/news/article-3739825/Bitter-Cabinet-feud-Boris-Fox-trade-secretary-tells-Theresa-break-Foreign-Office.html

Spain and France oppose Scotland EU talks: http://www.bbc.co.uk/news/uk-scotland-scotland-politics-36656980

Squirming Sturgeon says Scots will KEEP Pound, have no border with England AND stay in EU: http://www.express.co.uk/news/uk/683471/Brexit-Scotland-Nicola-Sturgeon-Scots-keep-pound-remain-EU

Brexiteer David Davis hits back at Sturgeon and RULES OUT Scotland veto over EU departure: http://www.express.co.uk/news/uk/690401/Brexit-Secretary-David-Davis-rules-out-Scotland-veto-EU-referendum-vote?utm_source=traffic.outbrain&utm_medium=traffic.outbrain&utm_term=traffic.outbrain&utm_content=traffic.outbrain&utm_campaign=traffic.outbrain

Sturgeon MOCKED over EU stance: ‘SNP has lost ANY NOTION of what independence is: http://www.express.co.uk/news/uk/692968/Nicola-Sturgeon-SNP-independence-Jim-Fairlie-BBC-mocked?utm_source=traffic.outbrain&utm_medium=traffic.outbrain&utm_term=traffic.outbrain&utm_content=traffic.outbrain&utm_campaign=traffic.outbrain

France has now overtaken the UK has the fifth largest economy in the world after Britain voted to leave the European Union in a historic referendum: http://metro.co.uk/2016/06/24/france-overtakes-uk-as-fifth-largest-economy-as-pound-plummets-5964746/

World’s biggest banks already plotting mass exodus from London after Brexit: http://www.independent.co.uk/news/business/news/brexit-latest-banks-leave-uk-eu-jpmorgan-goldman-sachs-citi-group-deutsche-bank-a7193686.html

Investment banks with headquarters in London ‘to move jobs from UK’ within weeks of Article 50 trigger: http://www.independent.co.uk/news/business/news/brexit-latest-banks-leave-uk-eu-jpmorgan-goldman-sachs-citi-group-deutsche-bank-a7193686.html

A Special Relationship for the UK After All: https://geopoliticalfutures.com/a-special-relationship-for-the-uk-after-all/

Theresa May will trigger Brexit negotiations without Commons vote: http://www.telegraph.co.uk/news/2016/08/26/theresa-may-will-trigger-brexit-negotiations-without-commons-vot/

Theresa May could start Brexit process without vote by MPs, Government lawyers reportedly say: http://www.independent.co.uk/news/uk/politics/theresa-may-eu-mps-vote-brexit-government-lawyers-telegraph-sources-a7212341.html

There’s a loophole in Article 50 that lets Britain back into the EU whenever we want: http://uk.businessinsider.com/brexit-how-does-article-50-work-2016-7

Germany warns UK ‘you can’t keep the nice things’ after Brexit: http://www.independent.co.uk/news/uk/politics/europe-could-go-down-the-drain-after-brexit-a7213976.html

Theresa May calls for Brexit talks amid fears of growing split at heart of Government: http://www.independent.co.uk/news/uk/politics/cabinet-and-the-civil-service-told-to-make-a-success-of-brexit-a7213806.html

Germany Warns U.K. That Brexit Talks Will Be Very Difficult: http://www.bloomberg.com/news/articles/2016-08-27/germany-warns-u-k-that-brexit-talks-will-be-very-difficult

Brexit could make insurance market move staff from UK says Lloyd’s of London boss: http://www.independent.co.uk/news/business/news/brexit-will-make-insurance-firms-quit-uk-says-lloyds-of-london-boss-a7225941.html

Brexit could spark City exodus as 80,000 jobs are moved to Europe, BCG says: http://www.independent.co.uk/news/business/news/brexit-could-spark-city-exodus-as-80000-jobs-are-moved-to-europe-bcg-says-a7124351.html

Theresa May says Brexit means difficult times ahead – these are the economic signs that will prove if she’s right: http://www.independent.co.uk/voices/brexit-theresa-may-interview-difficult-times-ahead-economic-signs-global-recession-europe-exports-a7225216.html

Exiting the European Union: Ministerial statement 5 September 2016: https://www.gov.uk/government/speeches/exiting-the-european-union-ministerial-statement-5-september-2016

David Davis faces cries of ‘waffle’ as cloudy Brexit vision fails to satisfy MPs: http://www.itv.com/news/2016-09-05/david-davis-delivers-his-brexit-vision-and-rules-out-back-door-deals-and-second-referendum/

David Davis – backed by Boris Johnson and Liam Fox – sets out Brexit plans – as it happened: http://www.theguardian.com/politics/blog/live/2016/sep/05/david-davis-brexit-commons-statement-leaving-uk-since-brexit-vote-poll-suggests-politics-live

Brexit minister David Davis heckled with calls of ‘is that it?’ by MPs as he outlines plans in House of Commons: http://www.independent.co.uk/news/uk/politics/brexit-minister-david-davis-heckled-with-calls-of-is-that-it-by-mps-as-he-outlines-plans-in-house-of-a7227441.html

PMQs: Theresa May mocks Jeremy Corbyn as a ‘laughing stock’ before publicly slapping down David Davis over Brexit: http://www.telegraph.co.uk/news/2016/09/07/theresa-may-brexit-confusion-jeremy-corbyn-pmqs-live/

Minister for Brexit’s claim about single market access is ‘not policy’ Downing Street says: http://www.independent.co.uk/news/brexit-minister-david-daviss-claim-about-single-market-access-is-not-policy-downing-street-says-a7228226.html

Donald Tusk tells Theresa May ‘the ball is in your court’ as he urges Britain to trigger Article 50: http://www.telegraph.co.uk/news/2016/09/08/donald-tusk-tells-theresa-may-the-ball-is-in-your-court-as-he-ur/

Tusk tells May to start Brexit process ‘as soon as possible’: http://www.itv.com/news/update/2016-09-08/tusk-wants-may-to-start-brexit-process-as-soon-as-possible/

Britain should make up its mind on start of Brexit talks – Eurogroup head: http://uk.reuters.com/article/uk-britain-eu-eurogroup-idUKKCN11F0YX

Theresa May faces Tory REBELLION as Boris Johnson leads group demanding ‘hard Brexit’: http://www.express.co.uk/news/uk/709432/tory-rebellion-Boris-Johnson-Theresa-May-Michael-Gove-Brexit-hard-group-change-Britain?utm_source=traffic.outbrain&utm_medium=traffic.outbrain&utm_term=traffic.outbrain&utm_content=traffic.outbrain&utm_campaign=traffic.outbrain

Work permits among Brexit options, home secretary says: http://www.bbc.co.uk/news/uk-politics-37332282

The secret history of the EU, written on an Italian prison island, reveals why the project is doomed , by Christopher Booker: http://www.telegraph.co.uk/news/2016/08/27/the-secret-history-of-the-eu-written-on-an-italian-prison-island/

We have entered EU purgatory. Exit might mean heaven – or hell, by Christopher Booker: http://www.telegraph.co.uk/news/2016/07/02/we-have-entered-eu-purgatory-exit-might-mean-heaven—or-hell/

Leaving the EU could cost us even more than staying in: http://www.telegraph.co.uk/news/2016/08/20/leaving-the-eu-could-cost-us-even-more-than-staying-in/

We need to get real about how to leave the EU, by Christopher Booker: http://www.telegraph.co.uk/news/2016/07/30/we-need-to-get-real-about-how-to-leave-the-eu/

The Three Brexiteers are overlooking a crucial detail on trade, by Christopher Booker: http://www.telegraph.co.uk/news/2016/09/10/the-three-brexiteers-are-overlooking-a-crucial-detail-on-trade/

Theresa May could begin Brexit process by February, says Tusk: http://www.bbc.co.uk/news/world-europe-37394808

Bring back Britannia to rule the waves after Brexit: http://www.telegraph.co.uk/news/2016/09/16/bring-back-britannia-to-rule-the-waves-after-brexit/

Hammond Said to Be Ready to Ditch EU Single-Market on Brexit: http://www.bloomberg.com/news/articles/2016-09-16/hammond-said-to-be-ready-to-ditch-single-market-access-on-brexit

Brexit talks may be most complicated negotiation ever, says Davis: http://www.theguardian.com/politics/2016/sep/12/brexit-talks-may-be-most-complicated-negotiation-ever-says-minister

David Davis admits possibility of UK exiting EU without trade deal: http://www.theguardian.com/politics/2016/sep/13/david-davis-admits-possibility-of-uk-exiting-eu-without-trade-deal

Ken Clarke tells constituents: ‘EU referendum is not binding’: http://www.theguardian.com/politics/2016/sep/13/ken-clarke-tory-constituent-brexit-eu-referendum-not-binding

PM should seek parliamentary approval over article 50, says Lords committee: http://www.theguardian.com/politics/2016/sep/13/pm-theresa-may-article-50-parliamentary-approval-house-of-lords-committee

Brexit negotiations will be kept SECRET: David Davis warns talk details not to be released: http://www.express.co.uk/news/politics/709927/Government-Brexit-details-secret-David-Davis-Lords

Tory Eurosceptics push for hard Brexit: http://www.theguardian.com/politics/2016/sep/18/tory-eurosceptics-push-for-hard-brexit-eu-single-market

Theresa May faces rebellion as Tory MPs launch new ‘hard Brexit’ campaign:  http://www.telegraph.co.uk/news/2016/09/17/theresa-may-faces-rebellion-as-tory-mps-launch-new-hard-brexit-c/

Brexit deal threatened with veto by four countries unless Theresa May guarantees their citizens right to work in Britain: http://www.telegraph.co.uk/news/2016/09/17/brexit-deal-threatened-with-veto-by-four-countries-unless-theres/

Germany Discovers Some Home Truths About Brexit by Dr Gunnar Beck:http://www.wsj.com/articles/germany-discovers-some-home-truths-about-brexit-1473875500

Brexit may bring difficult times, says Theresa May: http://www.bbc.co.uk/news/uk-37268458

Japan’s ambassador in London on the ‘surprise’ vote for Brexit: https://www.ft.com/content/7f11f610-7a8d-11e6-b837-eb4b4333ee43

Experts warn UK won’t have trade deal with EU within two years: http://www.independent.co.uk/news/uk/politics/brexit-latest-news-article-50-triggered-when-trade-deal-negotiations-experts-warn-a7328721.html

Brexit warning: US bank bosses from Goldman Sachs, Morgan Stanley and BlackRock threaten Theresa May with relocation: http://www.telegraph.co.uk/news/2016/09/24/brexit-warning-us-bank-bosses-from-goldman-sachs-morgan-stanley/

Mood hardens in Berlin over Brexit demands: https://www.ft.com/content/da850d86-82f1-11e6-8897-2359a58ac7a5

The Brexit negotiations: the UK government will have incentives to compromise: http://blogs.lse.ac.uk/brexit/2016/08/04/the-brexit-negotiations-the-uk-government-will-have-incentives-to-compromise/

Post-Brexit trade negotiations would pose significant practical challenges for Whitehall: https://constitution-unit.com/2016/05/27/post-brexit-trade-negotiations-would-pose-significant-practical-challenges-for-whitehall/

Theresa May warns that there are ‘difficult times ahead’ as Britain leaves the EU: http://www.independent.co.uk/news/uk/politics/theresa-may-brexit-eu-g20-china-summit-andrew-marr-difficult-times-plain-sailing-a7224306.html

Theresa May to decide over Brexit talks, No 10 says after Boris begins setting out strategy: http://www.telegraph.co.uk/news/2016/09/22/theresa-may-to-decide-over-brexit-talks-no-10-says-after-boris-b/

Theresa May dismisses threat of Brexit deal veto: https://www.theguardian.com/politics/2016/sep/19/theresa-may-dismisses-threat-of-brexit-deal-veto

Theresa May stamps her authority on Brexit plans after Boris Johnson strays from the script: http://www.independent.co.uk/news/uk/politics/downing-street-theresa-may-authority-over-boris-johnson-article-50-comments-a7324566.html

Wall Street warns Theresa May of need for ‘long runway’ before Brexit: https://www.ft.com/content/7099b2e6-7ff9-11e6-8e50-8ec15fb462f4

What will Brexit mean for the City of London?: https://www.ft.com/content/23d576b0-386a-11e6-a780-b48ed7b6126f

Japan’s Message to the UK and EU: http://www.mofa.go.jp/files/000185466.pdf

Britain is completely lost after Brexit and will beg for a deal, Brussels believes: http://www.telegraph.co.uk/news/2016/09/09/uk-completely-lost-post-brexit-and-will-plead-for-a-deal-top-bru/

EU leaders ‘frustrated’ with ‘completely unrealistic’ Brexit strategy, warns Czech negotiator: https://www.rt.com/uk/358783-brexit-completely-unrealistic-czech/

Crashing out of the EU without a trade agreement would be an act of national self-harm: http://www.telegraph.co.uk/news/2016/09/15/crashing-out-of-the-eu-without-a-trade-agreement-would-be-an-act/

Britain risks EU fines over trade: http://www.thetimes.co.uk/article/britain-risks-eu-fines-over-trade-8b5mx5bdm

Nicolas Sarkozy would give Britain ‘chance to reverse Brexit vote’ if elected French president: http://www.itv.com/news/2016-09-27/nicolas-sarkozy-to-give-britain-chance-to-reverse-brexit-vote-if-elected-french-president/

Sarkozy vows to offer UK exit from Brexit if he wins French poll: https://www.ft.com/content/5763950a-84d4-11e6-8897-2359a58ac7a5

Anti-Brexit group wins right to disclose government’s legal defence: http://www.lawgazette.co.uk/law/anti-brexit-group-wins-right-to-disclose-governments-legal-defence/5057953.article?utm_source=dispatch&utm_medium=email&utm_campaign=GAZ28092016

Brexit: Italian PM Matteo Renzi warns UK over EU rights: http://www.bbc.co.uk/news/uk-politics-37502578

‘Don’t be blinded to the hard Brexit threat by today’s boom times’, warns car chief, as bosses call for UK to stay in the single market: http://www.thisismoney.co.uk/money/cars/article-3811338/Don-t-blinded-hard-Brexit-threat-today-s-boom-warns-car-chief.html

Brexit latest: Tariffs on UK car exports to Europe would be ‘disastrous’ for jobs says Jaguar Land Rover boss: http://www.independent.co.uk/news/business/news/brexit-latest-tariffs-on-uk-car-exports-to-europe-would-be-disastrous-for-jobs-says-jaguar-land-a7334991.html

Liam Fox signals Britain will leave the single market in ‘hard Brexit’: http://www.telegraph.co.uk/news/2016/09/29/liam-fox-signals-britain-will-leave-the-single-market-in-hard-br/

Nissan demands Brexit compensation for new UK investment: https://www.theguardian.com/business/2016/sep/30/nissan-hard-brexit-compensation-new-uk-investment-tariffs

Brexit: Theresa May to trigger Article 50 by end of March: http://www.bbc.co.uk/news/uk-politics-37532364

Pound takes a tumble after Theresa May unveils Brexit timetable: http://metro.co.uk/2016/10/03/pound-takes-a-tumble-after-theresa-may-unveils-brexit-timetable-6167112/

‘How low can she sink?’ Backlash as Tory MP criticises PM’s Brexit trigger timetable: http://www.express.co.uk/news/politics/716764/Anna-Soubry-Article-50-Brexit-Theresa-May

Theresa May’s timetable for Article 50 won’t allay Brexit concerns: http://www.independent.co.uk/voices/editorials/theresa-may-s-timetable-for-article-50-won-t-allay-brexit-concerns-a7341636.html

Article 50: EU president rejects Theresa May’s call for early start to preliminary Brexit negotiations: http://www.independent.co.uk/news/uk/politics/article-50-brexit-theresa-may-donald-tusk-eu-european-council-president-reject-preliminary-a7341686.html

Brexit: All you need to know about the UK leaving the EU: http://www.bbc.co.uk/news/uk-politics-32810887

Brexit: What are the options?: http://www.bbc.co.uk/news/uk-politics-37507129

Brexit ‘rollercoaster’ warning as Hammond axes deficit target: http://www.bbc.co.uk/news/uk-politics-37536943

Hard Brexit ‘could cost financial sector £38bn’: http://www.bbc.co.uk/news/business-37560471

FTSE 100 retreats from year-high and pound stalls above $1.27 after Theresa May criticises BoE’s monetary policy: http://www.telegraph.co.uk/business/2016/10/05/pound-falls-below-127-for-first-time-since-1985-and-ftse-10-dips/

BoE Brexit warning: http://www.independent.co.uk/news/business/news/bank-of-england-broadbent-swiss-bank-scam-monsanto-business-news-brief-a7346531.html

Brexit and Transatlantic relations: An American’s view: http://www.ictsd.org/opinion/brexit-and-transatlantic-relations-an-american

German industry cannot save Britain from hard Brexit, warns Merkel: http://www.telegraph.co.uk/news/2016/10/06/german-industry-cannot-save-britain-from-hard-brexit-warns-merke/

Brexit: Francois Hollande demands UK pay heavy price for deciding to leave EU: http://www.independent.co.uk/news/uk/politics/brexit-hollande-france-uk-must-pay-price-eu-withdrawal-crisis-a7349756.html

Michel Barnier on Brexit: We’ll strike a deal: http://www.politico.eu/article/michel-barnier-on-brexit-well-strike-a-deal-european-commissions-chief-brexit-negotiator/

Who is Michel Barnier? Meet the EU’s chief Brexit negotiator: http://www.bbc.co.uk/news/world-europe-37542204

EC negotiator meets Kenny over Brexit talks: https://www.rte.ie/news/2016/1012/823376-ireland-brexit/

Brexit: British expats sue EU’s Juncker over talks: http://www.bbc.co.uk/news/world-europe-37586587

Osborne warns against ‘hard Brexit’: http://www.scotsman.com/news/politics/osborne-warns-against-hard-brexit-1-4239010

Brexit: Leaving the single market could cost UK £40bn per year and 70,000 jobs, report warns: http://www.independent.co.uk/news/business/news/brexit-to-cost-40-billion-70000-jobs-a7345561.html

Business leaders plead against ‘hard’ Brexit: http://www.bbc.co.uk/news/business-37592866

PM must rule out ‘worst option’ of hard Brexit or firms will choke off investment, warns business chief: http://www.thisismoney.co.uk/money/news/article-3828326/Theresa-May-rule-worst-aspects-hard-Brexit-says-CBI-chief.html

Hard Brexit will cost City of London its hub status, warns Bundesbank boss: https://www.theguardian.com/world/2016/sep/18/hard-brexit-will-cost-city-of-london-its-hub-status-warns-bundesbank-boss

Hard Brexit will breed new bigotry, warns former Tory minister: https://www.theguardian.com/politics/2016/oct/01/hard-brexit-new-bigotry-warns-nicky-morgan

Hard Brexit to cost 2,000 Goldman jobs: http://www.thetimes.co.uk/article/hard-brexit-to-cost-2-000-goldman-jobs-9bt5c6vk9

Can the UK take over existing EU trade agreements?: http://www.bbc.co.uk/news/business-37574598

CBI  signs open letter to Government on Brexit (7 October 2016): http://www.cbi.org.uk/news/cbi-signs-open-letter-to-government-on-brexit-negotiations/

Ditch the ‘Hard Brexit’ Fallacy: https://www.bloomberg.com/view/articles/2016-10-09/ditch-the-hard-brexit-fallacy

Tory MP accuses government of ‘tyranny’ over Brexit strategy: https://www.theguardian.com/politics/2016/oct/10/tory-mp-anna-soubry-concerned-rush-hard-brexit

Theresa May rules out allowing MPs to vote on Brexit plans: http://www.telegraph.co.uk/news/2016/10/10/theresa-may-brexit-talks-denmark-netherlands-live/

CBI chief warns Theresa May hard Brexit could ‘close the door’ on an open economy: http://www.telegraph.co.uk/business/2016/10/09/cbi-chief-warns-theresa-may-hard-brexit-could-close-the-door-on/

Brexit: Hard border ‘would devastate communities’: http://www.bbc.co.uk/news/uk-northern-ireland-37602445

Labour demands parliamentary vote on Theresa May’s ‘hard Brexit’ negotiation plan: http://www.independent.co.uk/news/uk/politics/second-referendum-labour-vote-eu-brexit-jeremy-corbyn-keir-starmer-hard-a7352431.html

Pound hovers around $1.240 as businesses fear ‘hard Brexit’: https://www.theguardian.com/business/live/2016/oct/10/pound-sterling-falls-businesses-brexit-greece-business-live

Irish Republic signals support for UK plan to avoid post-Brexit ‘hard border’: https://www.theguardian.com/politics/2016/oct/10/idea-of-uk-border-controls-in-ireland-is-ridiculous-says-irish-mep-matt-carty

Weak pound drives FTSE 100 index to fresh record high: https://www.theguardian.com/business/live/2016/oct/11/pound-pressure-city-fears-hard-brexit-bank-of-england-business-live

Theresa May in ‘U-turn’ over pre-article 50 Brexit debate in parliament: https://www.theguardian.com/politics/2016/oct/12/theresa-may-accepts-need-for-brexit-debate-in-parliament

Theresa May vows ‘maximum possible access’ to single market as Jeremy Corbyn goes on attack for ‘shambolic Tory Brexit’: http://www.telegraph.co.uk/news/2016/10/12/brexit-strategy-theresa-may-labour-jeremy-corbyn-pmqs-live/

Brexit Blues for British Pensioners as Pound to Euro Rate’s Decline Hits Retirement Income: https://www.poundsterlinglive.com/eur/5574-pensions-foreign-exchange-brexit

Pound steadies after recent slump: http://www.bbc.co.uk/news/business-37628354

Pound falls back as Davis says government cannot outline Brexit aims in detail: https://www.theguardian.com/business/live/2016/oct/12/sterling-rebounds-brexit-fears-bank-of-england-business-live

Brexit: MPs warn David Davis that lack of clarity is spooking markets: https://www.theguardian.com/politics/2016/oct/12/brexit-mps-david-davis-eu-exit-plan

Brexit case ‘of fundamental constitutional importance’: http://www.bbc.co.uk/news/uk-politics-37639307

Court battle looms over Brexit legality: https://www.theguardian.com/politics/2016/oct/13/court-case-battle-looms-over-brexit-legality-article-50

Government cannot trigger Brexit without MPs’ backing, court told: https://www.theguardian.com/politics/2016/oct/13/government-cannot-trigger-brexit-without-mps-backing-court-told-article-50

‘Hard Brexit’ or ‘no Brexit’ for Britain – Tusk: http://www.bbc.co.uk/news/world-europe-37650077

Britain may decide against Brexit when they realise just how painful it will be, warns EU chief: http://www.telegraph.co.uk/news/2016/10/13/britain-may-decide-against-brexit-when-they-realise-just-how-pai/

London or New York? Why Brexit has shaken up the banking rivalry: http://www.telegraph.co.uk/business/2016/10/13/london-vs-new-york-brexit-just-shook-up-the-great-banking-rivalr/

France says US banks plan to leave Brexit Britain: https://www.theguardian.com/business/live/2016/oct/14/france-says-us-banks-plan-to-leave-brexit-britain-business-live

BBA chief warns some bankers could leave London if City does not get strong Brexit deal: http://www.telegraph.co.uk/business/2016/10/23/bba-chief-warns-some-bankers-could-leave-london-if-city-does-not/

Brexit: leading banks set to pull out of UK early next year: https://www.theguardian.com/politics/2016/oct/22/leading-banks-set-to-pull-out-of-brexit-uk

Banks preparing to leave UK over Brexit, says banking body chief executive: http://uk.reuters.com/article/uk-britain-eu-banks-idUKKCN12M0TZ

Britain’s banks to reveal solid third quarter results, warn of Brexit storm ahead: http://uk.reuters.com/article/uk-britain-banks-results-idUKKCN12N0D6

Brexit deal will most closely resemble Ceta agreement with Canada, Spain says: http://www.independent.co.uk/news/world/europe/brexit-deal-closely-resemble-ceta-trade-deal-canada-says-spanish-foreign-minster-a7366396.html

Britain must learn from the EU-Canada Ceta trade deal saga: https://www.theguardian.com/business/2016/oct/29/britain-must-learn-from-the-eu-canada-ceta-trade-deal-saga

Brexit High Court ruling on Article 50: what does historic decision mean and what happens next?: http://www.telegraph.co.uk/news/2016/11/03/historic-brexit-high-court-ruling-what-happens-next/

Brexit plans in disarray as high court rules parliament must have its say: https://www.theguardian.com/politics/2016/nov/03/parliament-must-trigger-brexit-high-court-rules?j=1901864&e=carl@ihtbar.com&l=346_HTML&u=30297332&mid=1062735&jb=0

UK will have less than 18 months to reach deal, says EU Brexit broker: https://www.theguardian.com/politics/2016/dec/06/uk-will-have-under-18-months-to-negotiate-deal-says-eus-brexit-broker

What Michel Barnier’s October 2018 timeline means for the Brexit negotiations: http://blogs.lse.ac.uk/europpblog/2016/12/08/what-barniers-timeline-means-for-brexit/

Preparaing for the UK’s Brexit negotiation (Chatham House): https://www.chathamhouse.org/publications/twt/preparing-uks-brexit-negotiation

EU leaders turn on each other over Brexit negotiation tactics, as David Davis warns them border controls are not up for discussion:  http://www.telegraph.co.uk/news/2016/12/14/eu-leaders-turn-brexit-negotiation-tactics/

Brexit trade deal could take 10 years, says UK’s ambassador: http://www.bbc.co.uk/news/uk-politics-38324146

Brexit: London’s 328-year old Lloyd’s insurance market to establish EU base in 2017: http://www.independent.co.uk/news/business/news/brexit-lloyds-of-london-insurance-market-brokers-move-eu-base-business-2017-a7476566.html

Brexit negotiations are not a zero sum game – here’s why: http://www.cityam.com/255673/brexit-negotiations-not-zero-sum-game-heres-why-

Brexit Secretary David Davis indicates EU exit could be stopped even after Article 50 is triggered: http://www.independent.co.uk/news/uk/politics/david-davis-article-50-stopped-brexit-latest-select-committee-a7475231.html

‘Lonely Theresa May’ video at EU summit is Brexit in a nutshell: https://www.theguardian.com/politics/2016/dec/15/lonely-theresa-may-video-at-eu-summit-is-brexit-in-a-nutshell

May warned of ‘complexities and difficulties’ of Brexit at EU summit: http://www.independent.co.uk/news/uk/politics/theresa-may-brussels-eu-summit-brexit-complex-difficult-negotiations-a7477291.html

The UK as we know it can’t survive Brexit and Trump: https://www.theguardian.com/commentisfree/2016/nov/17/britain-brexit-trump-scotland-northern-ireland-wales

Brexit and Trump could leave UK stranded between estranged allies: https://www.theguardian.com/politics/2016/nov/09/brexit-and-trump-could-leave-uk-stranded-between-estranged-allies

Trump aide told countries to use Brexit to steal trade: http://www.politico.eu/article/trump-aide-told-countries-to-use-brexit-to-steal-trade/

Brexit is ‘God-given’ chance to steal business from Britain, Donald Trump’s trade aide declares: http://www.mirror.co.uk/news/uk-news/brexit-god-given-chance-steal-9514138

Donald Trump’s trade chief said ‘Brexit is God-given opportunity for Britain’s financial rivals’: http://www.independent.co.uk/news/uk/politics/donald-trump-s-trade-chief-brexit-god-given-right-eu-a7495906.html

Donald Trump aide Wilbur Ross: ‘Use Brexit to steal UK trade’: http://news.sky.com/story/donald-trump-aide-wilbur-ross-use-brexit-to-steal-uk-trade-10707632

So much for the special relationship! Trump’s trade chief urges rivals to use ‘God-given opportunity’ of Brexit to steal trade from Britain: http://www.dailymail.co.uk/news/article-4066016/So-special-relationship-Trump-s-trade-chief-urges-rivals-use-God-given-opportunity-Brexit-steal-trade-Britain.html

Brexit to fire starting gun on decade of economic disruption, says major report: http://www.independent.co.uk/news/uk/politics/brexit-latest-news-economy-jobs-market-theresa-may-decade-disruption-a7499171.html

UK in 2030: older, more unequal and blighted by Brexit, report predicts: https://www.theguardian.com/business/2016/dec/29/uk-in-2030-older-more-unequal-and-blighted-by-brexit-report-predicts

Future proof: Britain in the 2020s (IPPR Report Summary 29.12.2016): http://www.ippr.org/publications/future-proof-britain-in-the-2020s

Fresh Brexit challenge in high court over leaving single market and EEA: https://www.theguardian.com/politics/2016/dec/29/fresh-brexit-challenge-high-court-leaving-single-market-eea

Brexit: New legal challenges launched over leaving single market: http://www.standard.co.uk/brexit-new-legal-challenges-launched-over-leaving-single-market-a3429596.html

The 12-point Brexit plan explained: Theresa May warns EU she will walk away from a ‘bad deal’ for Britain: http://www.telegraph.co.uk/news/2017/01/17/theresa-may-warns-eu-will-walk-away-bad-deal-britain/

How UK and Europe reacted to Theresa May’s Brexit plans: http://www.itv.com/news/2017-01-17/theresa-mays-brexit-plans-how-uk-and-europe-reacted-to-pms-12-points-for-negotiations/

Theresa May’s Brexit plan ‘alarming for businesses in both UK and Ireland’: http://www.belfasttelegraph.co.uk/news/brexit/theresa-mays-brexit-plan-alarming-for-businesses-in-both-uk-and-ireland-35373959.html

Liam Fox launches Brexit trade crusade confirming informal talks already under way with 12 countries across the world: http://www.telegraph.co.uk/news/2017/01/18/liam-fox-launches-brexit-trade-crusade-confirming-informal-talks/

Wall Street Meets May in Davos as Banks Plan Own Brexit: https://www.bloomberg.com/politics/articles/2017-01-19/may-meets-wall-streeters-in-davos-as-banks-plan-brexit-exodus

Davos 2017: Philip Hammond praises ‘scale and depth’ of the City after Theresa May says Britain is ‘open for business’: http://www.telegraph.co.uk/business/2017/01/19/davos-2017-theresa-may-says-britain-open-business-brexit/

Brexit: May warns business leaders not to fuel division: http://www.bbc.co.uk/news/uk-politics-38669531

Theresa May lectures super-rich at Davos as Brexit plan backlash grows: http://www.standard.co.uk/news/politics/theresa-may-lectures-superrich-at-davos-as-brexit-plan-backlash-grows-a3444386.html

Davos: Theresa May hails UK as ‘foreign investment hub’ despite banks looking to move jobs abroad due to Brexit: http://www.independent.co.uk/news/uk/politics/davos-theresa-may-uk-foreign-invvestment-hub-brexit-speech-banks-goldman-sachs-move-axe-jobs-abroad-a7535001.html

Brexit: Supreme Court says Parliament must give Article 50 go-ahead: http://www.bbc.co.uk/news/uk-politics-38720320

Brexit judgment live: Supreme Court rules against Theresa May on Article 50 by a majority of 8 to 3: http://www.telegraph.co.uk/news/2017/01/24/supreme-court-article-50-brexit-judgment-ruling-live/

Article 50 Brexit vote: Full list of MPs who backed Theresa May starting official EU negotiations – and those who voted against: http://www.independent.co.uk/news/uk/politics/article-50-parliament-mps-vote-brexit-theresa-may-eu-negotiations-labour-conservative-how-voted-a7558291.html

Scottish parliament to hold its own vote on triggering Brexit: http://uk.reuters.com/article/uk-britain-eu-scotland-idUKKBN15H2MR

The Observer view on parliament’s sovereignty over Brexit: https://www.theguardian.com/commentisfree/2017/feb/05/parliament-must-ensure-second-brexit-referendum

The Brexit White Paper completely contradicts a key argument for Brexit: http://www.independent.co.uk/news/uk/home-news/brexit-white-paper-uk-parliament-remian-sovereign-eu-membership-referendum-campaign-brussels-article-a7559556.html

The white paper on Brexit: a wish list disguised as a strategy : https://www.theguardian.com/politics/2017/feb/02/the-white-paper-on-brexit-a-wish-list-disguised-as-a-strategy

This hidden line in Brexit White Paper shows how Theresa May CAN’T get a bad deal from EU: http://www.express.co.uk/news/uk/762785/Brexit-white-paper-emergency-Theresa-May-European-Union

Leaving single market may be ‘biggest act of protectionism in history’, George Osborne warns: http://www.independent.co.uk/news/uk/politics/george-osborne-single-market-brexit-immigration-theresa-may-a7603391.html

Sir John Major launches extraordinary attack on Theresa May’s government over Brexit: http://www.telegraph.co.uk/news/2017/02/27/sir-john-major-warns-theresa-may-hard-brexit-could-mean-cuts/

UK being led to expect ‘unreal’ future post-Brexit, says John Major – video: https://www.theguardian.com/politics/video/2017/feb/27/uk-being-led-to-expect-unreal-future-post-brexit-says-john-major-video

Brexit: BMW considers moving production of new electric Mini to Germany from Oxford: http://www.independent.co.uk/news/business/news/brexit-latest-news-bmw-new-electric-mini-germany-oxford-car-plant-industry-a7603006.html

Third of manufacturing firms want to move some operations out of UK after Brexit, report warns: http://www.independent.co.uk/news/uk/politics/brexit-latest-third-manufacturing-firms-leave-uk-eu-article-50-report-kpmg-a7594606.html

What is Article 50? The only explanation you need to read: http://www.telegraph.co.uk/news/0/what-is-article-50-the-only-explanation-you-need-to-read/

Theresa May plans to trigger Brexit in two weeks despite defeat by ‘posturing’ Lords over rights of EU citizens: http://www.telegraph.co.uk/news/2017/03/01/brexit-lords-vote-debate-theresa-may-pmqs-live/

Lords urge Tories to back Brexit bill amendment on EU citizens: https://www.theguardian.com/politics/2017/mar/01/lords-defeat-government-over-rights-of-eu-citizens-in-uk-brexit-bill

How was Article 50 triggered and what happens now?:  http://www.telegraph.co.uk/news/0/article-50-triggered/

‘No turning back’ on Brexit as Article 50 triggered: http://www.bbc.co.uk/news/uk-politics-39431428

Article 50 triggered: Theresa May formally begins Brexit negotiations to leave EU: http://www.independent.co.uk/news/uk/politics/article-50-trigger-latest-theresa-may-brexit-begins-leave-eu-talks-negotiations-a7655636.html

What happens now that Britain has triggered Article 50?: http://www.economist.com/blogs/economist-explains/2017/03/economist-explains-10

Brexit: how will the negotiations work?: https://www.instituteforgovernment.org.uk/blog/brexit-how-will-negotiations-work

Angela Merkel derails Theresa May’s Brexit plan by rejecting parallel trade talks – Britain is to be put into the slow lane: http://www.independent.co.uk/news/uk/politics/brexit-article-50-angela-merkel-rejects-theresa-may-parallel-talks-a7656506.html

EU open to UK trade negotiations before Brexit, but parallel talks ‘will not happen’: http://www.dw.com/en/eu-open-to-uk-trade-negotiations-before-brexit-but-parallel-talks-will-not-happen/a-38223183

EU says no to free-trade talks until ‘progress’ on final Brexit terms: https://www.theguardian.com/politics/2017/mar/31/eu-willing-to-discuss-free-trade-deal-before-final-terms-of-brexit

BRUSSELS BUCKLES: EU WILL open trade talks before Brexit despite Merkel saying NO: http://www.express.co.uk/news/world/786165/brexit-eu-trade-talks-exit-negotiations-britain-angela-merkel-donald-tusk-theresa-may

Divorce First, Trade Talks Later, E.U. Tells U.K: https://www.nytimes.com/2017/03/31/world/europe/uk-brexit-eu-donald-tusk.html?_r=0

EU will ban UK from cutting tax or scrapping regulation as price of trade deal: http://www.telegraph.co.uk/news/2017/03/31/brexit-donald-tusk-article-50-eu-watch-live/

EU’s approach to Brexit talks: http://g8fip1kplyr33r3krz5b97d1.wpengine.netdna-cdn.com/wp-content/uploads/2017/03/FullText.pdf

In full: The EU’s draft guidelines for Brexit negotiations: http://www.telegraph.co.uk/news/2017/03/31/full-eus-draft-guidelines-brexit-negotiations/

With Brexit in mind, just how long do trade deals take to agree?: https://www.weforum.org/agenda/2016/07/how-long-do-trade-deals-take-after-brexit/

The EU has told Britain that ‘humongous’ Brexit negotiations will take up to ten years: http://uk.businessinsider.com/eu-britain-brexit-negotiations-article-50-theresa-may-ivan-rogers-ten-years-2017-2

European leaders to formally reject Theresa May’s Brexit timetable: http://www.telegraph.co.uk/news/2017/03/30/european-leaders-formally-reject-theresa-mays-brexit-timetable/

EU will ban UK from cutting tax or scrapping regulation as price of trade deal: http://www.telegraph.co.uk/news/2017/03/31/brexit-donald-tusk-article-50-eu-watch-live/

Brexit: UK’s most prominent ex-ministers unite against Theresa May’s ‘no deal’ threat

Exclusive: As Article 50 is triggered, Michael Heseltine, Peter Mandelson and Vince Cable warn of catastrophic consequences: http://www.independent.co.uk/news/uk/politics/article-50-brexit-theresa-may-michael-heseltine-peter-mandelson-vince-cable-a7654896.html

Pro-EU politicians must show courage to oppose Brexit, says Mandelson: https://www.theguardian.com/politics/2017/feb/19/pro-eu-politicians-must-show-courage-to-oppose-brexit-says-mandelson

Fury as Peter Mandelson tells the EU to ‘Forget Great Britain and take care of your own interests’: http://www.dailymail.co.uk/news/article-4394526/Fury-Peter-Mandelson-tells-EU-Forget-Great-Britain.html

How to beat the ticking Brexit clock: let British business leaders do the talking: https://www.theguardian.com/commentisfree/2017/jul/18/brexit-british-business-leaders-legatum-eu

In David Davis, Britain has a schoolboy in charge of the moon landings – Not all the early signs point to the Brexit secretary being a reckless bluffer who is wildly out of his depth. But most of them do: https://www.theguardian.com/commentisfree/2017/jul/18/david-davis-brexit-secretary

Brexit negotiations ‘have not begun well’ – Sir Simon Fraser: http://www.bbc.co.uk/news/uk-politics-40846830

Brexit talks damaged by cabinet splits which leave UK without a coherent strategy, says former top diplomat: http://www.independent.co.uk/news/uk/politics/brexit-talks-cabinet-splits-uk-no-strategy-leave-eu-sir-simon-fraser-foreign-office-831-a7880246.html

Nobel winners: Drift to hard Brexit is ‘strategic suicide’: http://www.theweek.co.uk/brexit/65461/brexit-what-theresa-mays-ecj-u-turn-means

‘Deep pessimism’ over Brexit outcome as Nobel laureates gather in Germany: http://www.telegraph.co.uk/business/2017/08/24/questions-brexit-outcome-nobel-laureates-gather-germany/

Nobel prize winner says UK science is under threat from Brexit, which should ‘go away’: http://www.independent.co.uk/news/science/brexit-nobel-prize-chemistry-fraser-stoddart-chemistry-molecular-machines-a7347471.html

This is what the single market and customs union actually are – and here’s what will happen to Brexit if we leave them: http://www.independent.co.uk/voices/single-market-brexit-customs-union-what-is-it-brexiteers-misleading-economy-a7874351.html

Brexit deal breakdown risks catastrophe, says industry: https://www.ft.com/content/2d3fa91c-68a9-11e7-8526-7b38dcaef614

Brexit could lead to ‘complete breakdown’ between UK and EU, says former European Commission official -David Wright spent more than 30 years at the heart EU’s executive arm in Brussels, working with commissioners such as Leon Brittan and Michel Barnier, the EU’s chief Brexit negotiator: http://www.independent.co.uk/news/business/news/rexit-latest-news-complete-breakdown-uk-eu-european-commission-david-wright-departure-article-50-a7594741.html

EU’s Brexit negotiator tells UK to speed up and ‘get serious’: https://www.theguardian.com/politics/2017/aug/28/michel-barnier-concerned-about-brexit-talks-progress-third-round

Brexit showdown: EU left ‘flabbergasted’ after British negotiators dismantle legal basis for divorce bill: http://www.telegraph.co.uk/news/2017/08/30/brexit-showdown-eu-left-flabbergasted-british-negotiators-dismantle/

UK prepares to play hardball after EU ‘massively over-egged’ Brexit bill: http://www.telegraph.co.uk/news/2017/08/28/uk-prepares-play-hardball-eu-massively-over-egged-brexit-bill/

BREXIT STALEMATE: Talks deadlocked as Davis to demand EU tears up £90BN divorce bill – BREXIT talks have reached a stalemate after tough-talking UK negotiators challenged their Brussels counterparts over the divorce payment demands and expressed increasing frustration at EU inflexibility: http://www.express.co.uk/news/uk/848080/brexit-talks-stalemate-david-davis-michel-barnier-divorce-bill-negotiations

Brexit negotiations

‘If there is one lesson that emerges from the negotiation literature, it is the importance of thorough preparation. In adequate preparation is one of the most common and costly mistakes in negotiations, and the investment needed should not be underestimated… As a rule of thumb, one expert suggests that 80 per cent of the work in a given negotiation should go into preparation, and 20 per cent into the negotiation itself. Planning in negotiation is as meticulous as preparation for war and it can involve weeks of arduous work. Two types of preparation are important in a trade negotiation. The first concerns the steps that need to be taken before entering into a specific negotiation. This includes accurately diagnosing the situation, convening the best possible negotiating team identifying precise negotiating objectives and developing a clear negotiating mandate. The second type of preparation is longer term. Long-term preparation focuses on improving the underlying institutions in order to bolster a country’s overall negotiating capacity. Key improvements include recruiting and retaining high-calibre negotiators, developing a strong evidence base, strengthening cross-government coordination and finding ways effectively to solicit contributions from stakeholders.’ Negotiating Against the Odds by Emily Jones.

‘EU economic diplomacy is shaped by the preferences of sector interests and by the positions of the various member states… Negotiating styles and interests vary from member state to member state and thus presidency to presidency.’ The New Economic Diplomacy: Decision-Making and Negotiation in International Economic Relations, by Nicholas Bayne and Stephen Woolcock.

‘The challenge in all economic diplomacy is to find an agreed position among the various ministries, branches of government and stakeholders/sector interests and still be able to negotiate at an international level. Finding a common position requires some aggression of preferences, for example, between protectionist and liberally minded sectors of the economy. In the case of the EU there is also a need to aggregate member state preferences in order to reach an agreement among the 27 member states. How the EU goes about this depends upon whether there is exclusive EU competence in the policy area concerned, or whether competence is shared with or retained by the member states…

EU economic diplomacy involves negotiation in order to seek international agreement in line with the EU’s policy and negotiating aims…

Negotiations in economic diplomacy are almost always mixed value-creation and value-claiming. Value creation is where negotiators seek compromises in order to reach an agreement with mutual gains. Value-claiming is where one party seeks only to get concessions or claim value from the other. Only in very rare cases do countries pursue value-claiming strategies. So negotiators are nearly always in the business of trading concessions. This requires of course some flexibility to accept an outcome that is less than optimal for one sector interest or group even if the overall benefits for the EU are greater. In the case of the EU, negotiations cannot practically be carried out by all 27 member states, so agents are designated by the Council to negotiate. Flexibility to enable value-creation through bargaining of concessions in negotiations therefore concerns the relationship between whoever is negotiating for the EU and the member state governments or other principals. The principal-agent relationship in EU economic diplomacy differs from policy area to policy area.

Policy initiatives come from the Commission or from a combination of the Commission and members states. These proposals are then discussed in working groups [and] for trade policy this would be the Trade Policy Committee (‘TPC’) that brings together senior member state officials. There are equivalent working groups in other areas… which are served by specialist sub-committees. Much of the work developing EU negotiating positions is done in such specialist committees and senior working groups before the final political decision to authorise the opening of a negotiation is taken by the Council. The Council level decision is taken by member state ministers in the relevant specialist Council, such as the…Foreign Affairs Council for trade and development..The European Council often provides an endorsement of the overall EU position at the level of Heads of State and Government. Once the EU position is adopted and the Council has nominated the negotiator, negotiations begin with supervision being provided by the working groups for most substantive issues or the relevant Councils if political level action is needed.’ European Union Economic Diplomacy: The Role of the EU in External Economic Relations, by Stephen Woolcock.

Food and drink is the largest UK manufacturing sector, accounting for 16% of total manufacturing turnover. According to the Food and Drinks Federation (‘FDR’), the gross value added to the economy is £21.9 billion (which almost amounts to automotive and aerospace combined).

What is the government’s plan?

Until a political decision has been made and voted on in Parliament about whether or not Britain is to remain in the EU single market and customs union, how can Britain and the EU negotiate a FTA, as there is no trade agreement model on the table to negotiate terms about.

Following the German Federal election the time that will remain to make a decision, propose a position, and agree terms, will be less than 10 months (taking into account Christmas, and the usual New Year, Easter, and Summer holiday periods in 2018). After March 2019 the EU’s priority will be to progress the negotiation of FTA’s with other countries, to which negotiations with Britain over Brexit are likely to be relegated when allocating technical negotiating resources. Britain’s negotiators should not waste a minute of the precious little time available which the EU have allocated to Brexit because this is not an elastic window, although it can be extended.

What is the government’s plan? – NB the Treasury reported that whereas £13 bn of contributions were paid to the EU in 2015, there would be a 9.5% cut in UK GDP which would trigger a £66 bn (per annum) loss of tax revenues under WTO rules if there is a hard Brexit, which = 85.7% differential net loss if Britain falls over the cliff edge. In other words trading with the EU under WTO rules will cost Britain (in lost revenue) 6.5 times more per annum than the cost of full membership did in 2015. That does not include the cost to each British business of the consequential administrative burden of additional bureacracy and tariff charges, and that is only half of the picture. As observed in the Brexit Roadmap on the Diplomatic Law Guide (www.diplomaticlawguide.com) underneath the heading ‘Regularising the UK’s WTO scheduled commitments’, ‘Britain is currently a member via the EU. Full members must deposit ‘schedules’ of tariffs, quotas, subsidies and other concessions on market access with the WTO. The UK will have to negotiate its own schedules, initially with the other 27. The tariff negotiation could be simple if the British followed what the EU currently does. But dividing up quotas, on say New Zealand lamb imports, would be more complicated. And then the new British schedules would need the approval of all 163 WTO members, since the organisation’s decisions require consensus. So if one member (for example, Argentina or Russia) wanted to create difficulties, it could block the British schedules. British officials hope that such difficulties do not arise, but reckon that it will be hard work to sort out WTO membership within the two years of the Article 50 negotiation.’

Where are Britain’s detailed position papers (for which we have had 12 months to prepare)? – NB: https://ec.europa.eu/commission/brexit-negotiations/negotiating-documents-article-50-negotiations-united-kingdom_en?field_core_tags_tid_i18n=351

If there is no strategic intelligence leading British negotiations with defined, practicable, and agreed (i.e. all singing off the same song sheet) objectives, then how can Theresa May’s government know where it is going and taking Britain?

How can it negotiate Brexit?

In “The Emperor’s New Clothes” (published 7 April 1837 in the final instalment of “Fairy Tales for Children”), Hans Christian Andersen told the tale of two weavers who promised an emperor a new suit of clothes which they said was invisible to those who were unfit for their positions, stupid, or incompetent. When the emperor paraded before his subjects in his new clothes, no one dared to say that they didn’t see any suit of clothes on him for fear that they would be seen as “unfit for their positions, stupid, or incompetent”. Finally, a child cried out, “But he isn’t wearing anything at all!”

Does this have any resonance for the trust politicians expect British voters to place in them to conclude terms of a comprehensive FTA with the EU before October 2018?

Do they see something that nobody else does?

If not, when the Article 50 clock stops ticking, unless an interim arrangement is actually in place (which has to be agreed), then what is the likelihood of Brexit negotiations resulting in a fairy tale ending?

In an article published in the Guardian (18 July) ‘How to beat the ticking Brexit clock: let British business leaders do the talking’, Miriam González Durántez concludes,

‘The best thing this government could do to appease the serious concerns of UK business leaders on Brexit is to rely on the business leaders themselves. This means no more toying with extravagant and ill-founded ideas. And it also means seeking an interim arrangement with the EU to continue benefiting from the single market and the customs union for as long as is needed until an alternative EU-UK deal is reached, as business leaders have proposed. This can be done by placing the UK into the European Economic Area on a temporary basis, and/or looking for an ad hoc arrangement extending the current status quo. Neither the extreme Brexiteers nor the extreme remainers like this option, but it is the only sensible thing to do right now. It allows the UK government to win time. And time is what the government needs – to get the skills it misses, to draft proposals it has not even started to draft yet and to negotiate with the serenity that the high economic interests at stake deserve. 

An interim deal is the only way to deal with the ticking clock Michael Barnier hears because, as any trade negotiator knows, there is nothing worse than negotiating against time. Except for negotiating against time in pursuit of delusional and unrealistic ambitions.’ 

https://www.theguardian.com/commentisfree/2017/jul/18/brexit-british-business-leaders-legatum-eu

She also observes that at the meeting held at Chevening last week,

‘British business leaders were asked to share the table with the Legatum Institute, a think tank with unparalleled access to Davis and Theresa May and that seems to have been at the origin of some of the preposterous positions on Brexit taken by the government so far. Its inexplicable presence at that table was the clearest signal that the government has not changed its views on Brexit after the general election even one tiny little bit.’ [In which case, in spite of the Chancellor’s economic concerns, the Government remains unswerving it is determination to negotiate a hard Brexit].

‘Unlike think tanks like the Center for European Reform which knows more about the EU than the whole cabinet put together, the common characteristic of most of the Legatum trade commission seems to be not having worked at any time within the EU or even directly with it. I have negotiated myself for the EU on many occasions on trade, and I have seen how shocked negotiators from other countries become when they realise how difficult it is to negotiate with 27 countries – with their own institutions and legal system – at the same time. 

It is easy to see why this government would be mesmerised by Legatum. It is keen on unilaterally removing tariffs and quotas on agriculture products (farmers, take note) in exchange for services agreements all over the world. The effect of this on food security and food prices was highlighted this week in a report published by the University of Sussex. Equally importantly it doesn’t take much to realise that we are going to need an agriculture market at least 50 times the size of the UK’s to secure like-for-like access in foreign markets for our much larger services sector. A think-tank that can’t even work out the respective sizes of our farming and services sectors is in dire need of a lot more “thinking”. 

The institute also seems to be behind Davis’s recurrent claim that the UK will have “frictionless” access to the single market even if it is not part of it – an embarrassing comment that brings despair to Europeans, as the single market is a system of rules based on trust and a single legal order, and therefore accessible only to those who are part of it. When the EU negotiator Michel Barnier says that “some in Britain still do not understand”, he seems to be referring among others to how Davis still has not understood this. 

The main idea of the institute, though, seems to be the creation of a “prosperity zone” between the UK, Australia, New Zealand and Singapore, eventually extended to the US, Canada and Mexico, if the North Amercian Free Trade Agreement renegotiations succeed. This is actually an old idea, originally floated by Mitt Romney in 2008. It obviously did not work then, and it will not work now. One does not need to have a Nobel Prize in trade economics to realise that, even with the US and Canada included (which is very unlikely indeed) this can hardly compensate for all the trade that the UK will lose by stepping out of the EU.’ 

In an article in the Guardian (18 July) ‘In David Davis, Britain has a schoolboy in charge of the moon landings – Not all the early signs point to the Brexit secretary being a reckless bluffer who is wildly out of his depth. But most of them do’ (https://www.theguardian.com/commentisfree/2017/jul/18/david-davis-brexit-secretary) the Guardian columnist Rafael Behr observes,

‘One definition of an ideologue is a person who responds to the collision of opinion with reality by insisting that reality must yield.

There are times when stubbornness is admirable, when formidable obstacles must be overcome by transcendent principle. Without that idea, Mahatma Gandhi would have bowed to British colonial rule. Rosa Parks would have surrendered her seat to a white passenger on an Alabama bus.

But in those cases, systemic prejudice ruled out negotiated compromise. Brexit is not such a case, and David Davis is no Rosa Parks. 

The Brexit secretary is certainly stubborn when it comes to belief in his own abilities. He is also on a collision course with a wall of reality in Brussels. It is a stark fact that Britain’s prosperity and security depend on his technique for navigating that obstacle. 

Early signs are not encouraging. It would be silly to extrapolate too much from the photograph, published on Tuesday, depicting Davis empty handed at a table opposite Michel Barnier, his European commission counterpart, who is holding a heap of notes. Officials say the snap was taken before UK team members had unpacked their own stack of documents. 

But, as is often the case with such episodes, the awkward optics reinforced a valid caricature: Davis as an amateur trying his (and his country’s) luck against professionals. It did not help that Davis was on his way back to Westminster within an hour of the picture being taken. The defence was that underlings remained and got down to business. 

But it is another stark fact of Brexit dynamics that Barnier’s staff are drilled in EU process and law. They are playing at home. Team Davis has hardly laced its boots. Whitehall is unable to plan for the government’s desired outcome because no one knows what it is. The UK is also unpractised in negotiating in Brussels as an external party because we have, until now, been an integral component of this thing called Europe. 

British “position papers” on technical aspects of the negotiation (how to trade in nuclear material when article 50 requires exit from Euratom, for example) make painful reading for anyone seeking reassurance that Davis’s department is match fit. They are vague summaries of problems without solutions, as if the authors are only now beginning to grasp the challenges, through the act of writing them down for the first time.

British officials could not build a workable Brexit model before article 50 was triggered because the prime minister would not divulge her preference. She then squandered weeks on an election campaign that turned ambiguity into paralysis. 

Anyone imagining that a strategic intelligence lurked behind the scenes should ponder Davis’s assertion last July that the UK could expect to conclude trade deals with the US, India, China and Japan among other countries, starting in September 2016. “Within two years, before the negotiation with the EU is likely to be complete … we can negotiate a free trade area massively larger than the EU,” he said. 

Where are those deals? As long as the UK is part of the single market and the customs union – which it will be until at least March 2019 – there can be no external trade pacts. Thereafter, an optimistic expectation for the duration for such complex talks is five years. Put politely, Davis was talking out of his article 50 ignorance. 

That might be cited as evidence to support the charge levelled this week by Dominic Cummings, former head of Vote Leave, that Davis is “thick as mince, lazy as a toad and vain as Narcissus”.. Yet the jibe, typically unkind, was also unfair on two points. Davis is neither stupid nor idle. Arrogance alone could not have raised him from a penurious childhood to the top of government. He is energetic and cunning. But his skills are suited to a peculiarly British mode of advancement: the celebration of swagger and bluff over due diligence. Davis has benefited from Westminster’s generosity to men who gamble and busk their way through scrapes born of their own ill preparation – overgrown schoolboys who shirk their homework, then talk their way out of detention.

It is a trait Davis shares with Boris Johnson, one of his rivals in a succession battle, should Theresa May be deposed. Both have a reputation in government for ignoring their briefing notes. 

Viewed from Brussels, where there is a higher premium on command of boring detail, it is depressing to see the question of Britain’s European future yet again subsumed into a parochial Tory pissing contest. It is irritating too to Brexit realists in the cabinet, one of whom has urged May to slap down the testosterone-fuelled “donkeys” in government. 

Davis’s allies say completion of Brexit is his only goal, after which he intends to retire. That denial does not rule out finishing the job from No 10, should a vacancy arise. Supporters also say Davis is also pragmatist – unlike the wilder ideologues, who prefer a frenzied bolt out of the EU exit to a staged departure. 

Davis has yielded to some realities. His early bravado has been tempered by recognition that aspects of the job “make the Nasa moonshot look simple”. He accepts the need for an “implementation phase” to Brexit. He knows that some payment will be made to settle the UK’s EU budget obligations. He has forged an alliance with Philip Hammond, the cabinet’s leading advocate of the view that drastic rupture from the single market would be ruinous. But awareness of potential calamity is not proof of a strategy to avoid it. Assurances of Davis’s sober intent cannot expunge his record of maverick gestures. 

The Apollo 11 mission is a better metaphor than the Brexit secretary realised. It took the best part of a decade to plan. It cost billions. It was delivered by forensic expertise, not cocksure improvisation. Besides, getting to the moon was only half of the job: Nasa would not have initiated the countdown without a plan to get everyone back to Earth unharmed. Yet Davis is at the controls, already firing us out of Europe’s orbit on an undefined trajectory, with a shaky grasp of the laws of political gravity.’

What is the single market?

If you stopped a member of the public on the street and asked ‘what is the economic rationale and function of the European single market?’, what is the likelihood they would preface their remarks by explaining:

  1. differing national technical and licensing regimes create major obstacles to a unified market, restricting market entry on a grand scale;
  2. differing product standards and certification procedures hamper the Europe-wide acceptance of numerous items ranging from cars to pharmaceuticals, and cereals;
  3. the basic rule on the elimination of non-tariff barriers to trade is enshrined in Article 34 of the Treaty of the Functioning of the European Union (‘TFEU’) which provides,

‘Quantitative restrictions on imports and all measures having equivalent effect shall be prohibited between Member States’;

  1. ‘measures having equivalent effect’ has been defined by the European Court of Justice as meaning,

‘All trading rules enacted by Member States which are capable of hindering, directly or indirectly, actually or potentially, intra-community trade are to be considered as measures having an effect equivalent to quantitative restrictions’ (Fourcroy v Dassonville [1974]).

Therefore Articles 34 and 35 (which contains a similar prohibition for the export of goods) apply to any conceivable, discriminatory and non-discriminatory, direct and indirect hindrances to trade within the internal market; and

  1. Article 26 of the TFEU propounds the existential policy that,

‘The Union shall adopt measures with the aim of … ensuring the functioning of the internal market, in accordance with the relevant provisions of the Treaties… The internal market shall comprise an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured in accordance with the provisions of the Treaties.

Efficiency depends upon integration. ‘Thus an essential thrust of the move towards completion of the internal market by 1992 was the harmonisation of regulatory regimes with respect to financial services, securities, insurance, company law, and telecommunications, as well as community-wide standards with respect to product safety, and technical specifications’. (The Regulation of International Trade by Trebilock, Howse, and Eliason).

Integration determines economic power. ‘The EU’s role and possibly effectiveness in international economic negotiations will be greater the larger the EU’s economic power. Equally important is the ability or willingness on the part of the EU to offer or deny access to its market. In the exercise of such market power it is the EU as a whole that counts and therefore the ability of the EU rather than the member states to determine access. If one takes market size as a measure of economic power then clearly the more integrated the EU market the greater the potential economic power of the EU.’ (European Union Economic Diplomacy by Stephen Woolcock).

Reduction of relative market power is an existential threat. It also proves the fallacy that Britain will be economically better off ‘out’ rather than ‘in’ because we can then negotiate FTA’s on our own terms. As we will be proceeding from a position of weakness against states that belong to trading blocs who in relation to the UK have vastly superior market power to dictate terms in their own favour, it is they (including the EU) who will be in the driving seat and not us. This is a stark negotiating reality that the British public does not yet appear to have grasped or even woken up to. Furthermore, because terms pivot upon residual integration post-Brexit, no state is likely to conclude and implement terms of a FTA with the UK until the EU and UK have agreed and implemented terms of a FTA to govern their future trading relationship, which typically can take up to seven years from commencement of FTA negotiations (which have not yet started), see the Brexit page of the Diplomatic Law Guide which refers to research by the Peterson Institute: http://newsite.diplomaticlawguide.com/brexit-2#roadmap

‘Relative market power is important because all economic diplomacy is shaped to a greater or lesser degree, and more or less formally, by reciprocity or the view that there should be a broad balance of benefits (or costs) resulting from any negotiation. The issue is generally how such a balance is defined and over what period. In some areas such as trade policy, reciprocity has been and remains, for better or for worse, one of the underlying principles of the GATT/WTO system of multinational trade negotiations. Relative market size is even more important in bilateral (or other preferential) trade negotiations that have become the dominant feature of international trade negotiations since the late 1990’s. In 2009 the EU constituted the largest single market in the world with a GDP in purchasing power parity of $14.5 trillion, just slightly larger than the US at $14trn and equivalent to China, India, Brazil and South Africa put together ($14.9trn) (European Union Economic Diplomacy by Stephen Woolcock).

When the British public voted for Brexit I wonder what percentage could have explained if you had stopped them on the street and asked them, what the Single Market and Customs Union actually are, and the existential significance of the relationship between relative market size and integration?

For a definition of ‘customs union’ please visit the ‘Bilateral and Regional Trade Agreements’ page of the Diplomatic Law Guide: http://newsite.diplomaticlawguide.com/bilateral-and-regional-trade-agreements#structuring

In his article published in the Independent 3 August 2017, ‘This is what the single market and customs union actually are – and here’s what will happen to Brexit if we leave them’, Richard Corbett wrote,

‘The debate about continued British membership of the single European market is often confused, because the shorthand term “membership”, just like the term “access to”, can mean different things.

There is not actually an entity called the “single market” that you can apply to join. The EU has created an “internal market” as one of its policies, and it has associated countries from outside the EU with it, to various degrees, as the EU treaties allow it to do. The EEA countries (Norway, Iceland and Liechtenstein) are the most closely involved though not quite fully participating, as fish and agriculture are excluded. Switzerland is involved through different arrangements. So are others, to a lesser degree, such as Moldova.

The shorthand term “members of the single market” is inaccurate, but is usually used to refer to the EEA countries and Switzerland. Those countries have red-tape-free access to the single market for most of their products, on the condition that they follow its rules.

After all, that is what the single market is about: ensuring that there are common standards on consumer protection, workers’ rights, the environment and fair competition means that products do not need to be checked at borders and can circulate without hindrance. This is particularly important for supply chains that criss-cross borders, such as in the manufacture of automobiles and aircrafts, or in agriculture. It is also vital in transport, where, notably, the right of airlines to fly across Europe is conditional on them complying with EU safety standards and being tested by the European Air Safety Agency. Britain’s financial sector, which provides one third of government tax revenue, is similarly dependent on its right to passport insurance and banking services across the single market in accordance with its rules.

In other words, “membership” of the single market is vital for our economy, jobs and public finance. 

But here’s the rub: leaving the EU, assuming we go ahead with it, means Britain will have no direct say on those rules anymore. We would probably have some influence – the EEA countries are consulted on draft single market legislation – but we would no longer have representation where the final decisions are taken: the EU Council of Ministers and the European Parliament.

This loss of influence is the political price of leaving the EU. We do not need to compound that by the economic damage of distancing ourselves from the single market.

Some argue that we must leave the single market in order to make our own, separate rules, otherwise we will be a rule-taker, not a sovereign state. But the supposed gain in sovereignty would not be so great as to justify the huge economic cost. EU legislation in its entirety amounts to some 13 per cent of our laws according to the House of Commons library, and single market rules are a proportion of that. Within even that smaller proportion, we would have little option but to keep most of it anyway.

First, some of it is where the EU has set standards that have since become world standards, as frequently happens. Second, sectors such as chemicals, aviation, pharmaceuticals and agriculture will still be dependent on EU rules that apply to their supply chains. Thirdly, some EU rules are the simple application in the single market of world level agreements in the WTO, UN agencies and so on. Fourthly, most rules are not controversial and there would be no particular gain from changing them. All in all, the extra “sovereignty” to do our own thing would, in practice, be limited, and not worth the economic damage of leaving the single market.

Others argue that staying in the single market does not respect the result of the referendum. Yet, it was Leave campaigners themselves who promised that we could leave the EU without economic damage because we’d stay in the single market:

“I’d vote to stay in the single market. I’m in favour of the single market,” said Boris Johnson.

“Only a madman would actually leave the [single] market,” said Owen Paterson.

“Increasingly, the Norway model looks best for the UK,” said Arron Banks.

“Absolutely no one is talking about threatening our place in the single market,” said Daniel Hannan.

A similar argument applies to the customs union – the arrangement whereby EU countries don’t impose any tariffs on trade between themselves, but set a common external tariff to the outside world. Leaving the customs union would probably mean tariffs and certainly mean border checks on our exports to, and imports from, the EU, which, let us not forget, is our biggest trading partner by some margin.

The price to pay here is that staying in the customs union means we can’t negotiate a different set of tariffs with third countries. But the new shiny trade agreements offered by Liam Fox are anyway turning out to be illusory. It won’t be easy to get better deals than we have secured via the EU with countries around the world. These have been negotiated with the clout of the whole of Europe – the world’s largest market – behind us. Negotiating new agreements, as Britain alone, and in a hurry, would not be to our advantage. If we gain anything at all compared to now, it is unlikely to balance the loss of diminished access to the European market.

Few people voted for Brexit-at-any-cost; indeed they were told it would save money that could go to the NHS. If it turns out to be a costly exercise, damaging the economy, they will be entitled to feel let down. A soft Brexit, staying in the single market and the customs union, will attenuate that cost and is arguably the only kind of Brexit that would come close to what several Leave campaign leaders pledged. But many would go further and say that even these costs, and the loss of British influence over decisions that will affect us anyway, are too high a price to pay for Brexit.And if this government doesn’t fall within the next 18 months and muddles its way through to an unclear, half-baked, or clearly damaging deal, then the clamour for a rethink of Brexit will grow. As Manuel Cortes said from a trade union perspective: “If a bad deal is on the table, the prospect of staying in must be an option.”

And as David Davis himself said: “If a democracy cannot change its mind it ceases to be a democracy.”

This still has a long way to go. But the fact that, well over a year after the referendum, there is still no clarity in what alternative to full membership we might go for means that no option should be closed.’

Alternatives to EU membership

On 2 March 2016, Government published a paper analysing potential alternative models for the UK’s relationship with the EU. A summary of key points from the Government paper is included below.

Alternatives to membership: possible models for the United Kingdom outside the European Union

Government will seek the best possible balance of advantage for the UK. But regardless of the preferred outcome that the UK seeks, any existing alternative model to the UK’s EU membership would mean having to make a number of difficult trade-offs, including:

  • in return for full access to the EU’s free-trade Single Market for key UK industries, the UK would have to accept the free movement of people, contribute to EU spending and comply with EU rules;
  • no model outside the EU offers the same level of access to the Single Market that the UK currently enjoys. Access for services, which account for almost 80 per cent of the UK economy, would be reduced;
  • the UK may lose preferential trade access to 53 markets outside the EU, such as Mexico, South Africa and South Korea – these deals would have to be renegotiated, which could take years;
  • the UK may lose or have reduced access to cross-border action against criminals, including the European Arrest Warrant, some of which are only available for EU Member States; and
  • the UK would no longer be able to use the EU as one of the ways in which it can project UK influence in the world, for example by driving united European action to impose sanctions on Russia or Iran.

Key features for alternative relationships with the EU are set out below.

  • The Norway model
  • Considerable access to the Single Market but not in agriculture and fisheries, with tariffs applying to many agrifood product exports to the EU;
  • No access to EU trade deals;
  • Customs checks required on all goods crossing into the EU;
  • Norway contributes significantly to EU spending;
  • Norway is obliged to accept the free movement of people from the EU;
  • Around 6 percent of Norway’s resident population are EU nationals – a higher proportion than in the UK; and
  • An independent study commissioned by the Norwegian Government calculated that Norway has incorporated approximately 75 per cent of EU laws in return for access to the EU market, but with no vote or veto on the creation of those rules.
  • The Switzerland model
  • These arrangements go furthest in replicating the benefits of EU membership;
  • Limitations on access to the Single Market;
  • Must comply with the majority of rules governing the Single Market but has no vote or veto over the creation of EU rules;
  • Makes a significant contribution to EU spending;
  • Required to accept the free movement of people in return for EU market access;
  • There are almost four times as many EU nationals resident in Switzerland, as a share of the population, than in the UK; and
  • Took two decades to negotiate agreements with the EU. In recent years, both the EU and the Swiss have called the viability of this model into question.
  • The Canada model
  • The EU-Canada Agreement took seven years to negotiate from scoping and it is not yet in force;
  • Provides Canada with only partial access to the EU Single Market and does not allow tariff-free access for all manufactured goods;
  • Quotas remain in place for key agrifood exports – for the UK this could mean, for example, a 12 per cent tariff on a large share of the UK’s beef exports to the EU;
  • Canadian manufacturers must comply with Rules of Origin, requiring that a proportion of the product is made in Canada in order to qualify for preferential tariffs in trade with the EU. This means extra bureaucratic costs; and
  • Firms that export to the EU must comply with EU product standards and technical requirements without any say in setting them.
  • World Trade Organization-only model
  • If we failed to reach a deal with the EU, we would have to revert to trading arrangements based on WTO rules, as Brazil does with the EU;
  • The UK would have to apply have a single, universal set of tariff rates, covering imports from the EU and the rest of the world alike. Under WTO rules, we would not be allowed to treat any of the WTO’s 161 other members differently, unless we had a trade agreement with them;
  • Tariffs would apply to UK exports to the EU, making our exports less competitive e.g. tariffs of 36 per cent on dairy products;
  • Similarly, prices paid for imported goods would also be affected;
  • UK industries with supply chains across the EU could suffer due to increased tariffs and bureaucratic burdens; and
  • Increased trading costs as a result of tariffs could result in higher consumer prices.

FDR: https://www.fdf.org.uk/eu-referendum-alternatives-eu-membership.aspx

In an article written by Luis Gonzalez Garcia, a Barrister and former trade negotiator for the Government of Mexico (which is on the Matrix Chambers website: https://www.matrixlaw.co.uk/resource/new-proposal-uks-post-brexit-trade-agreement-part-1-luis-gonzalez-garcia/) Mr Garcia explains that,

‘The UK wants to get the best possible access for goods and services to the European market. At the same time, it wants greater regulatory space in shaping its own trade policy. Yet, there is a problem, because the more access to the European single market, the more the UK has to align its legislation to EU law. This leaves much less policy space in shaping its own trade policy and regulations…The question then is, which trade model provides the best possible balance between these two competing aspects?’

He argues that, ‘the only available and achievable trade model that the UK has at its disposal to maintain the best possible access to the single market, and at the same time one which could allow the UK in achieving its role as a global leader in world trade, is a bespoke ambitious deep integration trade agreement. I believe the future UK–EU trade model could incorporate elements of the EU Association Agreements and the EU’s most recent FTAs. In my view, the UK and the EU could establish a free trade area with the objective to liberalize (zero import tariff) cross-border trade in agricultural, fishery, and industrial goods. This trade model (or any other single market model), however, means that UK exporters would have to comply with the administrative burden of rules of origin.

The scope of liberalisation under the proposed model would vary depending on the sector and discipline. For trade in goods, the UK could, for example, seek sector-specific customs union-type where both sides would maintain the same tariff towards third countries in order to get full access to the UK market. This means that UK would agree to replicate the EU most-favoured nation tariff schedule it maintains on certain sensitive goods.

A sector-specific trade regime would secure the best possible access to the EU market and at the same time give the UK freedom in the negotiation of FTAs with third countries. This, however, would come at a cost. The UK would have to align itself with parts of the customs regime and technical regulations of the EU. On balance I believe the benefits of deep economic integration with the EU market outweigh the costs.

For trade in services, I expect an almost perfect liberalisation (deeper than current EU FTAs and GATS) given the complete regulatory convergence, mutual recognition, regulatory transparency and cooperation of both sides. I use the word ‘almost’ because, under EU trade practice, liberalisation of services goes hand-in-hand with harmonisation of legislation, free circulation of capital and persons. This means that the UK would have to accept the obligation of complying with EU legislation and free movement of skilled workers, and independent professionals (mode 4 of supply under the GATS)…

I believe that the UK will have less than 14 months to negotiate its future trade relationship with the EU. Given the complexity and scope of the negotiations this is likely to be insufficient time to conclude a comprehensive trade agreement. A transitional arrangement would thus be necessary to avoid trade disruptions. The transitional arrangement would be different for goods and services.

For trade in goods, I believe a comprehensive customs union with the EU should be put in place for three years to allow:

1.   A complete review of the UK’s industrial, agricultural and fisheries policies and regulations;

2.   The private sector to adjust supply chains, accountancy and financial operations, and customs authorities to prepare for the administrative burden of having to handle a mountain of customs declarations and certificates of origin;

3.   Set up the UK’s international trade defence authority and, potentially, initiate trade defence investigations;

4.   The UK to conclude interim trade agreements with EU trade partners; and

5.   The UK to conclude negotiations regarding its WTO agricultural commitments with WTO members.

For services, the UK should be allowed to continue participating in the EU’s single market for services under the same conditions as the EU Member States. This means that EU workers should retain the right to live and work in the UK post-Brexit. This is crucial to facilitate a smooth Brexit transition on trade and services.’

This begs seven questions:

1.      has there been a complete review of the UK’s industrial, agricultural and fisheries policies and regulations – and when was this reported to Parliament?;

2.      what is the UK Government’s proposed ‘UK–EU trade model’, and is it sound – critically has it been formulated following a complete review of the UK’s industrial, agricultural and fisheries policies and regulations? (and if not, what evidence, opinions, and assumptions is it based upon?);

3.      given that the EU as an institution cannot develop a negotiating position on the terms of any trade agreement until detailed terms have been proposed, if the UK Government does not propose a ‘transitional arrangement’ before triggering Article 50, how is it going to be possible to negotiate a ‘transitional arrangement’ within the negotiating window available?;

4.     if the UK exits the EU without a ‘bespoke ambitious deep integration trade agreement’ or a ‘transitional arrangement’, what trade law and economic consequences will inevitably follow, who evaluated the potential impact of these risks on the UK economy, what was their methodology, and when was any economic risk analysis reported to Parliament for debate?;

5. given that the right of EU workers to live and work in the UK post-Brexit is an integral component of the ‘UK–EU trade model’ recommended by Luis Gonzalez Garcia (above), if the UK Government’s Brexit strategy is based upon the same trade model, and provided the other member states are willing to adopt that model, i.e. as the foundation upon which to collaborate in exploring and jointly developing a mutually satisfactory trading arrangement (using creative problem-solving techniques), it is axiomatic that every other member state must reciprocate and pass laws to enshrine the right of UK workers to live and work in their country post-Brexit – otherwise the model does not work. Therefore what is there to negotiate about these rights? If nothing, then the right of EU workers to live and work in the UK post-Brexit is not, and cannot be used as, a ‘bargaining chip’, because it is an implicit pre-condition to mutual adoption of the trade agreement model;

6. has the UK Government developed a different trade model? – in which case what is the UK Government’s trade model?; and

7. what international trade rationale underlies the strategic assumption that it is in the political and economic self-interest of each member state, and of the EU as an institution, to adopt the UK Government’s proposed trade model?

As Professor Raymond Saner (who is an expert on international trade and inter-governmental negotiations) warns, ‘Strategy is the overall guideline, indicating the direction we need to take from our wishes and needs to our objectives. If, given a set of specific interests and objectives, we choose the wrong strategy, we will be setting a wrong course from the very start. We would then be very lucky to get to where we want to go.’ The Expert Negotiator, by Professor Raymond Saner.

A further observation is that until a bespoke trade agreement or a transitional agreement has been concluded with the EU, no state with whom the UK wishes to negotiate a FTA can properly formulate a position upon the scope and terms of a future bilateral agreement, because the extent of the UK’s freedom to agree the scope and terms of a FTA, will be curtailed by the terms of a bespoke UK-EU trade agreement or transitional arrangement. In other words, the UK’s negotiating counter-parties cannot know the extent to which the UK’s hands will be tied by the EU when the UK is free, post Brexit, to enter into a legally binding FTA.

As I concluded above (under the heading ‘BREXIT roadmap’):

‘[The] worst case scenario appears to be:

  • Article 50 is triggered in March 2017;
  • the UK leaves the EU in March 2019 (‘E Day’);
  • No FTA (or transitional arrangement) with the EU is agreed by E Day;
  • On E Day the UK no longer enjoys any rights under the FTA’s agreed between the EU and (53) other countries; and
  • On E Day no FTA’s are in place with non-EU countries (which in any event cannot be finally agreed until the UK has left the EU).’

‘…Brexiteers argue that, out of the EU’s clutches, Britain will be the WTO’s star pupil, striking trade deals across the world…However, there is a snag. Britain is already a member of the WTO, but operates through the EU. To become a fully independent member, Britain needs to have its own “schedules”, WTO- speak for the list of tariffs and quotas that it would apply to other countries’ products… The most simple course… [is] for Britain to keep its schedules as they are under the EU, including the “common external tariff” applied uniformly by EU members to imports from third countries. The government has recently hinted as much. This avoids diplomatic wrangling. But simply to readopt EU-approved commitments hardly looks like “taking back control”. It would also lead to other problems… If Britain kept the common external tariff in place then it might also apply to a company moving components between the EU and Britain. Such a firm could incur tariff charges each time a border is crossed. A WTO member might kick up a fuss if, say, one of its car companies with production facilities in both Britain and the EU suddenly found it more expensive to assemble a model. A related problem concerns the WTO’s “tariff-rate quotas” (TRQ’s). These allow a certain amount of a good to enter at a cheaper tariff rate. The EU has almost 100 of them…this is likely to become the most contentious issue in Britain’s re-establishment of its status as an independent WTO member… Some of these problems are surmountable…countries that stay in others’ good books find things easier. But so far, British politicians are also struggling on that front. Boris Johnson, the foreign secretary, has irritated his counterparts with clownish comments… When the reality of Brexit dawns, Mr Johnson and his fellow Brexiteers will find no trade deal to be especially appetising.’ (The Economist see below).

‘One of the most important questions for UK businesses and investors is whether the UK could trade under WTO rules as soon as it exits the EU. In my opinion the answer is twofold. First, the UK would most likely lose market access on goods in certain countries and face legal challenges by some WTO members unless it negotiates with both the EU and the WTO members its status as an independent member of the WTO. Second, in relation to the UK – EU trade relationship, if there is no FTA  in place on the date the UK exits the EU, it is highly likely that both sides will treat each other on WTO terms (including MFN tariff rates). Due to the EU’s current trade restrictions to third countries, this is not a desirable outcome for either side…The current EU schedule of commitments is the so-called “EU-15” of 2012. The fact that this is an outdated schedule is likely to complicate matters in the UK’s future WTO negotiation because the EU schedule of concessions and commitments regarding agricultural products, domestic support and export subsidies does not reflect the enlargement of the EU (from 15 to 28 Member States). This means that the UK – EU allocation of commitments will likely lead to a series of requests by third countries seeking new compensation from the EU and the UK. How will third countries react to the UK-EU distribution of concessions is anybody’s guess. But at least one can expect the following: it is highly unlikely that WTO members will challenge the UK’s rights, concessions or commitments on industrial goods, export subsidies entitlements including those on agricultural exports or its schedule of services. The challenge, however, is likely to focus on the EU’s agricultural commitments related to tariff rate quotas (TRQ’s) to third countries such as Australia, Argentina, Brazil, China, New Zealand, Thailand, Uruguay and the U.S. TRQ’s are volumes that can be imported with a low or zero tariff. Imports above the quota quantity enter with a higher tariff rate. The UK and the EU would need to negotiate a distribution of the EU’s TRQ’s. This would be problematic to third countries. They may find the redistribution of the EU’s TRQ’s as unfair because it would reduce their access to the EU market as a result of the UK’s exit. The TRQ’s are likely to become the most contentious issue in the UK’s re-establishment of its legal status as an independent member of the WTO. Now let us assume that the UK is unable to agree on new commitments with other WTO members on the day it exits the EU…In the case of UK exports to WTO markets including the EU (in case there is no trade agreement in place yet), one would expect WTO members (including the EU) to apply MFN rates to UK products. But this raises doubts as to whether the UK can trade under MFN tariffs without having to make any concessions or commitments to WTO members. Because the UK would be trading on MFN without being forced to grant concessions and TRQ’s to the rest of the WTO members and, thus, creating an unfair scenario for the other WTO members, it is possible that the UK may be subject to MFN restrictions by other WTO members until it regularises its legal status which can only occur once it has negotiated a new schedule of commitments.

An additional uncertainty, in this case a legal one, is the legal process under the WTO rules to re-establish the UK as an independent member of the WTO, in particular with regard to the distribution of commitments. There is no provision in the WTO framework which covers the particular situation of the UK. The closest provision seems to be Article 28 of GATT which provides for the modification of schedules. Whether this provision applies to the particular case of the UK is not entirely clear. Despite these complexities, WTO members could allow the UK to trade under WTO rules on an interim basis (one or two years) without a schedule of commitments while it concludes the negotiations with all individual WTO members.

Having said all the above, it must be stressed that nothing prevents the UK negotiation in the WTO from being simple and straightforward. This will depend entirely on the political will of the WTO members on whether they want to make the UK’s life outside the EU easy or complicated.’

Brexit: Challenges for the UK in negotiating an FTA with the EU (a trade negotiator’s perspective) below.

See:

Brexit: Challenges for the UK in negotiating an FTA with the EU (a trade negotiator’s perspective) by Luis González García (02.08.2016): https://www.matrixlaw.co.uk/resource/brexit-challenges-uk-negotiating-fta-eu-trade-negotiators-perspective-luis-gonzalez-garcia/

The “WTO option” for Brexit is far from straightforward (The Economist 07.01.2017): http://www.economist.com/news/finance/21713818-becoming-independent-member-wto-could-be-difficult-process

Brexit research resources

About the EU: https://europa.eu/european-union/about-eu_en

Article 50 Lisbon Treaty: http://www.lisbon-treaty.org/wcm/the-lisbon-treaty/treaty-on-European-union-and-comments/title-6-final-provisions/137-article-50.html

Article 50- What is article 50 and why is it so central to the Brexit debate?: http://www.theguardian.com/politics/2016/jun/25/article-50-brexit-debate-britain-eu

Article 50 People’s Challenge: a pre-hearing brief (Bindmans Solicitors): https://www.bindmans.com/insight/brexit/the-article-50-peoples-challenge-a-pre-hearing-brief

Bar Council Brexit Working Group Papers: http://www.barcouncil.org.uk/media/508513/the_brexit_papers.pdf

Bar Council Brexit Papers 2nd edition: http://www.barcouncil.org.uk/media/557778/170316_brexit_papers_second_edition_final_version.pdf

Bracing ourselves for Brexit – Simon Fraser outlines the priorities for profitable trading outside the EU (Chatham House): https://www.chathamhouse.org/publications/twt/bracing-ourselves-brexit

Brexit position papers: https://ec.europa.eu/commission/brexit-negotiations/negotiating-documents-article-50-negotiations-united-kingdom_en?field_core_tags_tid_i18n=351

Brexit White Paper – The United Kingdom’s exit from and new partnership with the European Union: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/589191/The_United_Kingdoms_exit_from_and_partnership_with_the_EU_Web.pdf

Centre for Economic Performance (LSE): http://cep.lse.ac.uk/

Claimant’s Skeleton Argument in the Judicial Review application by Gina Miller and Deit Tozetti Dos Santos –v- The Secretary of State for Exiting the European Union (13.10.2016) https://www.mishcon.com/assets/managed/docs/downloads/doc_3072/Skeleton_for_the_Lead_Claimant.pdf

Defendant’s (HMG’s) Skeleton Argument in the Judicial Review application by Gina Miller and Deit Tozetti Dos Santos –v- The Secretary of State for Exiting the European Union (October 2016) https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/558592/Miller_v_SSExEU_-_Skeleton_Argument_of_the_Secretary_of_State_300916.pdf

European Commission – DG Trade: http://www.eufp.eu/european-commission-dg-trade

EU Institutions: https://europa.eu/european-union/about-eu/institutions-bodies_en

EU Trade (homepage): http://ec.europa.eu/trade/index_en.htm

EU Trade – Investment: http://ec.europa.eu/trade/policy/accessing-markets/investment/index_en.htm

EU Trade Policy: http://ec.europa.eu/trade/policy/index_en.htm

Four Principles for the UK’s Brexit Trade Negotiations (by Thomas Samson LSE – CEP): http://cep.lse.ac.uk/pubs/download/brexit09.pdf

Future proof: Britain in the 2020s (IPPR Full Report 29.12.2016): http://www.ippr.org/files/publications/pdf/future-proof_Dec2016.pdf?noredirect=1

House of Commons Briefing Paper number 7694: ‘Brexit: trade aspects’ (30 January 2017): http://researchbriefings.parliament.uk/ResearchBriefing/Summary/CBP-7694

How have EU’s trade agreements impacted consumers? (by Breinlich, Holger, Dhingra, Swati and Ottaviano, Gianmarco I. P.): http://eprints.lse.ac.uk/66434/1/__lse.ac.uk_storage_LIBRARY_Secondary_libfile_shared_repository_Content_Centre_for_Economic_Performance_Discussion_papers_Mar%202016%20CEP%20Discussion%20Paper%27s_dp1417.pdf

How the European Union works: http://www.gr2014parliament.eu/Portals/6/PDFFILES/NA0113090ENC_002.pdf

How to beat the ticking Brexit clock: let British business leaders do the talking: https://www.theguardian.com/commentisfree/2017/jul/18/brexit-british-business-leaders-legatum-eu

How to Leave the EU – Legal and Trade Priorities for the New Britain by Martin Howe QC: http://politeia.co.uk/sites/default/files/files/How%20to%20Leave%20the%20EU.pdf

Institutions and Bodies of the EU: http://institutions.publicdata.eu/

Life after BREXIT: What are the UK’s options outside the European Union? (by Swati Dhingra and Thomas Sampson LSE-CEP): http://eprints.lse.ac.uk/66143/1/__lse.ac.uk_storage_LIBRARY_Secondary_libfile_shared_repository_Content_LSE%20BrexitVote%20blog_LEQSPaper26.pdf

Miller & Anor, R (on the application of) v Secretary of State for Exiting the European Union [2017] UKSC 5 (24 January 2017) (BAILII): http://www.bailii.org/uk/cases/UKSC/2017/5.html

Miller & Anor, R (on the application of) v Secretary of State for Exiting the European Union [2017] UKSC (Full Judgment): https://www.supremecourt.uk/cases/docs/uksc-2016-0196-judgment.pdf

R (Miller) -V- Secretary of State for Exiting the European Union (Judgment of the High Court down 03.11.2016): https://www.judiciary.gov.uk/judgments/r-miller-v-secretary-of-state-for-exiting-the-european-union/

R (Miller) -v- Secretary of State for Exiting the European Union (Divisional Court hearing – daily Transcripts and Judgment): https://www.judiciary.gov.uk/judgments/r-miller-v-secretary-of-state-for-exiting-the-european-union/

The Brexit scenarios: towards a new UK-EU relationship (by Brown, Stuart A., Dhingra, Swati and Oliver, Tim): http://eprints.lse.ac.uk/66928/

The consequences of Brexit for UK trade and living standards (by Dhingra, Swati, Ottaviano, Gianmarco I. P., Sampson, Thomas and Reenen, John Van): http://eprints.lse.ac.uk/66144/1/__lse.ac.uk_storage_LIBRARY_Secondary_libfile_shared_repository_Content_LSE%20BrexitVote%20blog_brexit02.pdf

The Tacitus Lecture 2017 – The World is Our Oyster? Britain’s Future Trade Relationships delivered by Sir Simon Frazer: http://www.flint-global.com/wp-content/uploads/Tacitus-Lecture-2017.pdf

The Worshipful Company of World Traders: http://www.world-traders.org/tacitus.php

This is what the single market and customs union actually are – and here’s what will happen to Brexit if we leave them: http://www.independent.co.uk/voices/single-market-brexit-customs-union-what-is-it-brexiteers-misleading-economy-a7874351.html

What does Brexit mean for international trade agreements?: https://www.monckton.com/brexit-mean-international-trade-agreements/

Brexit agreements