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Future trade with the EU

by Politicker 0 Comments

The Department for International Trade (DIT) today (5th January 2017) released a White Paper Preparing for our future UK trade policy.

This paper follows on from the Trade White Paper published in October and asked for views both on the specific legal powers and
the broader developing approach for the future Trade policy. The request for input, generated almost 8000 responses from a cross-section of business and society and this is the response and follow-up actions from the DIT.

It covers the following topics

  • Supporting a rules-based global trading environment
    • Schedules (WTO)
    • GPA
  • Boosting our trade relationships
    • Trading with the EU
    • Trading with the rest of the world
    • Transitioning EU-Third Country trade agreements
    • Negotiating and implementing new trade agreements
  • Supporting developing countries to reduce poverty
    • UK trading arrangements with developing countries
  • Ensuring a level playing field
    • Trade remedies
    • Conducting trade disputes
  • Trade that is transparent and inclusive
    • Transparency and scrutiny
    • Inclusiveness
  • Auxiliary Submissions
  • Conclusion

https://www.gov.uk/government/publications/trade-white-paper-preparing-for-our-future-uk-trade-policy-government-response/trade-white-paper-preparing-for-our-future-uk-trade-policy-government-response

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/671953/Trade_White_Paper_response_FINAL.pdf (pdf)

Government Vision for post EU Trade and Customs

by Politicker 0 Comments

The Government have released white papers which pave the way for legislation that will ensure the UK is ready for the first day after the UK’s exit from the EU.

The Trade White Paper, published by the Department for International Trade, establishes the principles that will guide future UK trade policy as well as laying out the practical steps that will support those aims.

UK Trade White Paper (pdf)

The paper establishes the principles that will guide future UK trade policy as well as laying out the practical steps that will support those aims and includes:

  • taking steps to enable the UK to maintain the benefits of the World Trade Organisation’s Government Procurement Agreement
  • ensuring the UK can support developing economies by continuing to give them preferential access to UK markets
  • preparing to bring across into UK law existing trade agreements between EU and non-EU countries
  • creating a new, UK trade remedies investigating authority

The Customs Bill White Paper, published by the Treasury, sets out plans to legislate for the standalone customs, VAT and excise regimes the UK will need once it leaves the EU.

Customs Bill White Paper (pdf)

Later this year, the government will bring a Customs Bill before parliament. The Customs Bill will give the UK the power to:

  • charge customs duty on goods; define how goods will be classified, set and vary the rates of customs duty and any quotas
  • amend the VAT and excise regimes so that they can function effectively post-exit
  • set out the rules governing how HMRC will collect and enforce the taxes and duties owed
  • implement tax-related elements of the UK’s future trade policy

For perhaps the first time, the Paper also consider a scenario, where the UK leaves the EU without a negotiated outcome on customs arrangements.

In this scenario, the Bill will make provision for the UK to establish a standalone customs regime from day one, including setting tariffs and quotas, and establishing a goods classification system in line with the government’s WTO obligations. The UK would apply the same customs duty to every country with which it does not have a trade deal or otherwise provide preferential access to the UK market, such as schemes for developing countries. The level of this duty would be decided by the government, and set out in secondary legislation before the UK leaves the EU. Currently, for the EU as a whole, only around 30% of imported goods (in value terms) are subject to the Common External Tariff. On the whole, traders who already import from outside the EU should see no change in the customs declarations procedures for those imports.

References

Government sets out vision for post EU trade and customs policy

Preparing for our future UK trade policy

WTO Agreement on Government Procurement

Customs Bill: legislating for the UK’s future customs, VAT and excise regimes

UK Trade Tariff: community and common transit outwards

Prime Minister’s speech in Florence

by Politicker

The Prime Minister, Theresa May, made a speech in the Italian city of Florence on 22 September 2017, to announce her vision of a new era of cooperation and partnership between the UK and the EU following Brexit.

A transcript of the speech (exactly as delivered) is available at:
https://www.gov.uk/government/speeches/pms-florence-speech-a-new-era-of-cooperation-and-partnership-between-the-uk-and-the-eu

She made the speech in an attempt to break a perceived deadlock in the on-going Brexit meetings with the EU, due to continue next week with the 4th round of negotiations, and to move on to talk about the future relationship between the UK and the EU.

There are a number of major differences between the UK and the EU in some areas of the negotiations which are currently focused on the arrangements for the UK’s withdrawal from the EU and covers the topics of EU Citizens Rights, Ireland and Northern Ireland and a financial settlement required by the EU from the UK.

On Ireland she said, the UK was committed to protect the progress made in Northern Ireland over recent years and the lives and livelihoods that depend on this progress.

As part of this, we and the EU have committed to protecting the Belfast Agreement and the Common Travel Area and, looking ahead, we have both stated explicitly that we will not accept any physical infrastructure at the border.

We owe it to the people of Northern Ireland – and indeed to everyone on the island of Ireland – to see through these commitments.

She said, in regards to ensuring the rights of EU citizens in the UK (which is due to be embedded in UK law),

Where there is uncertainty around underlying EU law, I want the UK courts to be able to take into account the judgments of the European Court of Justice with a view to ensuring consistent interpretation. On this basis, I hope our teams can reach firm agreement quickly.

The UK position on this is that British courts should have the final say while the EU considers that the European Court of Justice should have the final say. This is non-negotiable as far as the EU is concerned.

For a future Trade agreement between the UK and the EU, she also dismissed the idea of using an existing model, such as the arrangement between the EU and Norway or the Free Trade agreement between the EU and Canada, as a template.

As I said at Lancaster House, let us not seek merely to adopt a model already enjoyed by other countries. Instead let us be creative as well as practical in designing an ambitious economic partnership which respects the freedoms and principles of the EU, and the wishes of the British people.

To support this approach, she pointed out that the UK is currently the EU’s largest trading partner, is one of the largest economies in the world and it’s market is of considerable importance for many businesses and jobs across the continent.

The European Union has shown in the past that creative arrangements can be agreed in other areas. For example, it has developed a diverse array of arrangements with neighbouring countries outside the EU, both in economic relations and in justice and home affairs.

Furthermore, we share the same set of fundamental beliefs; a belief in free trade, rigorous and fair competition, strong consumer rights, and that trying to beat other countries’ industries by unfairly subsidising one’s own is a serious mistake.

So there is no need to impose tariffs where we have none now, and I don’t think anyone sensible is contemplating this.

In order for a future trade partnership to work she suggested an appropriate mechnaism should be found for resolving future disputes without the involvement of the European Court of Justice or UK courts.

It wouldn’t be right for one party’s court to have jurisdiction over the other. But I am confident we can find an appropriate mechanism for resolving disputes.

Presumably using an International Court or arbitration service.

She also proposed an “implementation period” after the UK leaves the EU in March 2019, with access to one another’s markets continuing on the current terms, for a time limited period.

…such an agreement on the future partnership will require the appropriate legal ratification, which would take time.

It is also the case that people and businesses – both in the UK and in the EU – would benefit from a period to adjust to the new arrangements in a smooth and orderly way.

As I said in my speech at Lancaster House a period of implementation would be in our mutual interest. That is why I am proposing that there should be such a period after the UK leaves the EU.

She suggested the implementation period (which has also been called a transitional period previously) should be for not more than 2 years and that during the implementation period EU citizens coming to work and live in the UK would be required to register – something which will probably not go down well in the EU.

For example, it will take time to put in place the new immigration system required to re-take control of the UK’s borders.

So during the implementation period, people will continue to be able to come and live and work in the UK, but there will be a registration system – an essential preparation for the new regime.

There was also an indication that the UK would continue payments to the EU to honour commitments made previously. If this was meant during the transitional period of 2 years, it has been suggested that this could amount to around £18 million or 20 million euros in total, although an actual amount has not been specified by the PM or her Government.

Still I do not want our partners to fear that they will need to pay more or receive less over the remainder of the current budget plan as a result of our decision to leave. The UK will honour commitments we have made during the period of our membership.

Overall, there didn’t appear to any new suggestions which were significantly different to anything which has been said in the past. Whether her speech has succeeded in opening up the Brexit negotiations to discussions about the future relationship between the UK and the EU remains to be seen.

Does the EU want to punish the UK for Brexit?

Recent headlines may imply that the EU may want to make an example of the UK for having the temerity to leave their EU club.

Michel Barnier was at a recent conference “Intelligence on the World, Europe, and Italy” held on 1st – 3rd September 2017 in Italy.

The forum is an annual event of international scope and prestige. Heads of state and government, top representatives of European institutions, ministers, Nobel prize winners, businessmen, managers and experts from around the world have been meeting every year since 1975 to discuss current issues of major impact for the world economy and society as a whole.

The forum is hosted by Ambrosetti

https://www.ambrosetti.eu/en/summits-workshops-forums/forum-villa-deste/

During his attendance at this conference Barnier has been quoted as making various statements such as:

While he did not want to punish the UK for leaving he did confirm Brexit would serve as an “an educational process” for the British.

I have a state of mind – not aggressive, but I’m not naïve

There are extremely serious consequences of leaving the single market and it hasn’t been explained to the British people.

We intend to teach people what leaving the single market means.

On the issue of finance he said

the UK must accept some key principles, such as honouring the commitment it made in 2014 to pay 14% of the EU budget until 2020

While these comments may have been taken out of context, it may be a true example of the real mentality behind the negotiation stance being taken by the EU.

It may also explain why the EU appears to be presenting a series of conditions for the UK to accept, a fait accompli, rather than a series of items that can be used as a basis for discussion and why the negotiations themselves do not appear to be making much progress.

The political ideology as being promoted by Barnier, Juncker and Verhofstadt may backfire eventually if there is a danger of the UK and EU having to adhere to WTO rules for their future trading relationship. Where countries which have large trade exports to the UK such as, Germany Ireland and the Netherlands may suffer more than other countries in the EU.

This could well see the EU and UK adopt a set of WTO trade rules which will govern their future trading relationship.

(www.poundsterlinglive.com)

In other news from the conference, a paper was presented titled “BREXIT one year later: Main implications and proposals to manage the transition underway” which explores and analyses the impact of Brexit on the EU and UK.

It contains an interesting table of Trade figures between the UK and other countries in the EU

and also comments that

According to the estimates of the European Commission, the hole left by the UK’s exit in Community finances will be over 10 billion euros per year. Source: Reflection Paper on the Future of EU Finances, 28 June 2017.

The paper concludes:

The real impact of Brexit is linked to the result of the negotiations between the two sides.

The scenario that seems to emerge shows that neither the EU nor the UK will likely see an improvement in their conditions as a result of London’s exit from the EU. Our greatest hope is therefore that the parties in question can build up the political will and the regulatory framework necessary to lead to an interruption and reversal of the current process, reconsidering Britain’s remaining within the EU.

References

https://www.poundsterlinglive.com/gbp-live-today/7462-gbp-to-eur-and-usd-conversions-brexit-dynamics-shift

http://www.bbc.co.uk/news/uk-politics-41140564

https://www.ambrosetti.eu/wp-content/uploads/Brexit-one-year-later-Position-Paper-2017.pdf (pdf)

https://ec.europa.eu/commission/sites/beta-political/files/reflection-paper-eu-finances_en.pdf (pdf)

UK Position Paper – Continuity in the availability of goods

The UK Government has published a position paper Continuity in the availability of goods for the EU and the UK.

Investors, businesses and citizens in the UK and across the EU want need to be able to plan ahead with certainty, and this paper sets out the desire to provide legal certainty and avoid disruption for business and consumers both in the UK and the EU.

Details of the paper can be found at

https://www.gov.uk/government/publications/continuity-in-the-availability-of-goods-for-the-eu-and-the-uk-position-paper

There is a deeply integrated trade and exconomic relationship between the EU and the UK and it is important to maintain this relationship after Brexit. The EU is the UK’s largest market for goods, and in 2016 other EU Member States, taken as a whole, exported more goods to the UK than any third country. EU statistics indicate that EU goods exports to the UK amounted to €314 billion in 2016, more than EU goods exports to Brazil, Russia, India and China combined.

As part of the UK’s preparations for a smooth and orderly withdrawal, the UK’s objective is to provide legal certainty and avoid disruption for business and consumers with respect to the continued availability of goods in the EU and the UK.

To achieve these objectives, the UK proposes the following four principles.:

  • To ensure the continued availability of products on EU and UK markets at the date of withdrawal, goods placed on the Single Market before exit should continue to circulate freely in the UK and the EU, without additional requirements or restrictions.
  • To avoid unnecessary duplication of activities and provide legal certainty, where businesses have undertaken compliance activities prior to exit, they should not be required to duplicate these activities in order to place goods on the UK and the EU market after exit. This includes recognising the validity of type approvals, certificates and registrations issued prior to exit.
  • To ensure that goods in circulation continue to comply with product legislation, and market surveillance authorities can ensure the necessary action is taken with respect to non-compliant products, the agreement should facilitate the continued oversight of goods.
  • Where goods are supplied with services, there should be no restriction to the provision of these services that could undermine the agreement on goods.

Full details are available in the position paper,

Continuity in the availability of goods for the EU and the UK (pdf)

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