The British prime minister, Theresa May, explained in a highly awaited speech in London on Friday 2 March, her vision of a post-Brexit economic partnership with the European Union covering a wide as possible number of sectors in line with the highest possible standards. She said that the United Kingdom didn’t want to remain in the Single Market or the Customs Union, and listed areas where the UK wishes to remain closely linked with the EU.
In a speech that was more realistic than those she has made in the past, the British leader recognised that London, like the EU, could not have everything it wanted from the talks and leaving the Single Market would clearly lead to reduced access to the EU market. She also abandoned the idea of keeping a European passport in the financial services domain.
Unsurprisingly, May rejected the existing models of partnerships among third countries and the EU, such as the free-trade agreement with Canada or the cooperation model with Norway, which could not meet the UK’s aspirations, she said.
Difficult to reconcile, the British aspirations oscillate between remaining as close as possible to the EU on the one hand by keeping the highest possible standards and rejecting free circulation of people and resumption of border controls on the other.
May presented a made-to-measure deal on Friday, rejecting the criticism that the UK was cherry-picking the best bits without taking up the obligations relating to belonging to the EU. She said that every free-trade deal already offered various types of access to the market and if that was cherry-picking, then free-trade deals were cherry-picking too.
The model set out by the British government is based on extended use of mutual recognition of rules and trust among partners. This model provides a few details and clarity to the EU27, tweeted the EU's chief negotiator, Michel Barnier, immediately after the speech, but didn’t explain how to avoid a physical border between the UK and Northern Ireland.
For example, the UK could remain ‘associated’ with the EU by paying a contribution and in partnership with the European Chemicals Agency (ECHA), the European Aviation Safety Agency (EASA) and the European Medicines Agency (EMA), but the British parliament would remain sovereign and might decide to block such participation.
Even after leaving the authority of the European Court of Justice, EU law may still affect the UK. The ECJ has been able to influence cooperation with the United States for data protection (the 'Safe Harbour' mechanism), for example but British courts would have power over disputes and sovereignty of law and order in the United Kingdom would be respected. The arbitration method would be key in resolution of any disputes, especially trade disputes.
A future customs partnership for goods
For goods, the British PM again rejected the fallback solution mentioned on Wednesday by the European Commission in a draft document on Brexit, a solution that May said would amount to creating a border in the Irish Sea beaten Northern Ireland and the United Kingdom.
May wants a flexible model so that the border between the Irish republic and Northern Ireland creates as little trade friction as possible. Two options are possible, which were presented back in 2017. The first would be a customs partnership between the UK and the EU. For imports from the rest of the world, London would apply the same customs rules and the same rules of origin as the EU for goods destined for the Internal Market. A mechanism would be established so that the UK can also apply its own customs duties and its own trade policy for goods headed for the UK.
The second option would be a highly simplified customs arrangement where both sides would consider jointly setting up a raft of measures to minimise friction in trade in Northern Ireland in particular, said May. Using the most advanced IT solutions, such measures would aim to make cross-border trade in goods as red-tape-free as possible in order to reduce delays in ports and airports.
The British leader mentioned the situation of small businesses, which account for 80% of trade between Northern Ireland and the Irish republic. She said small traders, who are the members of the community who would be the most affected, but whose role is not significant for the EU, would be allowed to continue to operate as they do at the moment without any new restrictions.
Imminent proposal on financial services
The Chancellor of the Exchequer, Philip Hammond, will spell out next week the UK’s ideas on financial services, the City of London being the biggest financial centre in the EU. London has decided to drop the European passport for financial services, but still wants financial services to be included in the future trade deal.
For the rest of the financial sector, May said she did not want to discriminate against service suppliers from the EU in the UK London wants to limit the number of obstacles that could arise and prevent British companies from setting up in the EU. The British authorities want to agree on a suitable setup for worker mobility based on mutual recognition of qualifications.
Broadcasting and audiovisual services would be covered by the above framework.
Other areas of interest, such as fisheries and energy
Brexit would mean the UK leaving the Common Fisheries Policy and taking control of these fisheries management rules and access to the CFP waters, said May. London wants, however, to cooperate with the EU at the same time to manage stock sustainably and organise mutual access to British waters for European fishermen and EU waters for British fishing vessels.
In many other areas, such as energy, transport, digital, law, science, innovation, education and culture, the British want to maintain close contact with the EU. For energy, for example, the UK wants to be able to continue to participate in the Single Market for European energy, said the British leader.
Michel Barnier welcomed the clarity of May’s speech, but the European Parliament reacted very differently. The leader of the EPP group, Germany’s Manfred Weber, said he was even more worried after May’s speech. Guy Verhofstadt (ALDE, Belgium), Parliament’s coordinator for Brexit, welcomed the reiterated commitment to avoid a hard Brexit physical border in Ireland, but wanted tangible proposals on how this could be brought about. While the aim of a close partnership was welcome, that must not turn into cherry-picking, he said. (Original version in French by Solenn Paulic)