Wednesday 20 March 2019

Theresa May secures approval from cabinet for deal that foresees UK-EU free trade area

  • May secures government agreement for Brexit stance
  • Envisages free trade area for goods
  • Appeases Brexit supporters in her cabinet
Stock image
Stock image

Shona Murray and agencies

British Prime Minister Theresa May secured a cabinet agreement on Friday for her plans to leave the European Union, overcoming rifts among her ministers to win support for "a business-friendly" proposal aimed at spurring stalled Brexit talks.

After an hours-long meeting at her Chequers country residence, May seemed to have persuaded the most vocal Brexit campaigners in the cabinet to back her plan to press for "a free trade area for goods" with the EU and maintain close trade ties.

The agreed proposal - which also says Britain's large services sector will not have the current levels of access to EU markets - will not come soon enough for Brussels, which has been pressing May to come up with a detailed vision for future ties.

In a document outlining the government's position, ministers said they had agreed that an earlier proposal made to the EU "needed to evolve in order to provide a precise, responsible and credible basis for progressing negotiations".

Instead, they had agreed to negotiate for a "free trade area for goods", one that would see Britain having a "common rulebook for all goods" in a combined customs territory. This would allow Britain to set its own import tariffs and seal new free trade deals.

The British government’s latest offering on Brexit ignores many of the EU’s immovable single market rules, but London has relented on some of its red lines.

High level sources have told that on first look Brussels will immediately shoot down some parts of the proposals as ‘cherry-picking’.

After a febrile week of bi-lateral meetings - including a secret invitation by the UK’s lead negotiator Ollie Robbins to Tánaiste Simon Coveney - there was cautious hope that the pressure on Britain over crashing out of the EU with no transition deal would motivate all sides to be "sensible".

The paper contains four major proposals.

Crucially, the first includes a common rulebook for all goods.

This in particular is likely to be seen as a non-runner by Brussels, and was already rejected in theory weeks ago when mooted through the press.

Any UK wide approach to goods and regulation represents Britain having access to the EU’s single market, without accepting the other principles on freedom of movement will be refused on first glance.

It is an immovable EU red line for the EU 27.

"Some interesting elements but we will need to see more detail.  And yes at first glance it would mean partial single market - if so, this would be a problem," said a Brussels Brexit source.

"But worthy of more detailed consideration and discussion I would say," they added.

The second piece keeps the UK in step with European Courts of Justice, most likely for goods, again. This is a major development for the UK cabinet to have agreed.

The third is a separate common rulebook on regulation and state aid.

The UK also proposes to work with Brussels on a new ‘Customs Arrangement’ which would replace the current customs union but work in the same way.

It would therefore remove the need for customs checks and controls between the North and Irish state.

This part is also conspicuously incomplete bearing in mind Brexiteers objectives to conduct trade deals with countries where goods are often incompatible with EU standards.

It appears difficult to see how such ambition can be reconciled.

"It sounds like a version of their customs partnership idea so again not immediately obvious how it could be agreed but need to see detail," the senior Brexit source said.

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