DIVORCE TO REDEFINE U.K.-EU TRADE TIES
Prime Minister aims to win back control of labour flows and lawmaking, lands new free trade pact by March 29 2019
PRIME Minister Theresa May set the United Kingdom on course for leaving the European Union (EU) in two years time, a divorce that will redefine the country’s relationship with its largest trading partner and end decades of deepening political integration on the continent.
“After nine months the UK has delivered,” said EU President Donald Tusk in a Twitter post after receiving a signed letter by May, which invoked Article 50 of the Lisbon Treaty.
The ties that have bound the UK to the EU since 1973 started to unravel at around 1.20pm here yesterday when Britain’s ambassador gave Tusk the letter.
“I want us to be a truly global Britain,” May told lawmakers in London.
Nine months since Britons unexpectedly voted to leave, the phony war of what Brexit might look like will turn into a real battle over the complex terms of a settlement with 27 other governments. Enough lines over money, trade and immigration have been drawn to suggest a tough process with costs to both sides.
“We’re moving from a UK monologue to a hard negotiation,” said Gregor Irwin, chief economist at Global Counsel, a consultancy, and a former official in the UK Foreign Office. “There are going to be many upsets along the way.”
The pound yesterday weakened against all of its Group-of10 peers and fell to a one-week low against the dollar. It has fallen 17 per cent since the referendum although it stabilised recently as investors awaited signs of how the talks would progress.
May is aiming by March 29 2019 to have won back control of labour flows and lawmaking, while also landing a new free trade pact with the bloc. The EU is demanding the UK first pay a £50 billion (RM274.5 billion) fee and there is the threat of sweeping tariffs being imposed if a deal isn’t struck in time.
In the background is London’s future as an international financial hub and threats by banks to up sticks. There’s also Britain’s commercial relations with the rest of the world and even the potential breakup of the UK as Scottish nationalists use Brexit in their push for autonomy. The legislature in Edinburgh voted on Tuesday to pursue another independence referendum.
The talks will test the negotiating mettle of a premier in power for just eight months and her ability to play to a domestic audience, especially the anti-EU wing of her Conservative Party that remembers she voted to stay in the bloc. Britain is divided over a “hard Brexit”, where May could walk away with no deal, and “soft Brexit” with continued tariff-free trade, which Scotland and other pro-EU factions want.
May interpreted June’s referendum result as a protest against some of the key tenets of globalisation, a trend that also swept Donald Trump to power in the United States and put National Front leader Marine Le Pen ahead in some polls before French presidential elections next month.
For Europe, it’s a question of cohesion. Any deal struck between the UK and the EU potentially could decide whether Britain proves to be a trailblazer for other countries to leave, or remain the sceptical outlier it has always been.
To ward against encouraging others to eye the exit door, EU officials said Britain would not be allowed to enjoy better terms outside the bloc than inside it.
May wants to leave the EU’s single market to reduce the number of people allowed into Britain to work. She also wants to escape the oversight of the European Court of Justice and cease sending what she calls “vast” sums of money to Brussels.
As for trade, she is requesting the “best possible deal”, while at the same time winning the freedom to line up trade accords with countries such as the US and China. Bloomberg