May’s ‘third way’ would tie UK to EU rules ‘indefinitely’
BRITAIN will sign a formal treaty with the European Union after Brexit that will tie the UK to Brussels customs rules on goods, under plans to be un- veiled by Theresa May today.
The Prime Minister’s “third way” on customs – now called the “evolved Mansion House model” – crosses clear red lines for Eurosceptics and will be the subject of a furious backlash at Chequers today.
It commits Britain to accepting “European harmonised standards” on manufactured goods and removes any right for the UK to diverge in the future by putting forward its own “competing national standards”.
It also concedes that it will limit the UK’S ability to strike a post-brexit free trade deal with the US, and says that British courts “must follow” the jurisdiction of the European Court of Justice in some areas.
The 100-page paper was leaked within an hour of being shared with ministers yesterday afternoon and has prompted open rebellion from Eurosceptic MPS.
Single market on goods
The Prime Minister’s scheme will commit the UK to a “single standards” model on goods and agricultural produce, aligning Britain to EU regulations.
It states that “the UK should maintain a common rule book for all goods including agri-food”.
It adds that Britain will have to make “an upfront choice to commit by treaty to ongoing harmonisation of EU rules”. The document is clear that there will be “consequences” if the UK tries to diverge by creating its own set of standards.
It says: “We would make a continued commitment to the Single Standards Model for goods so that where there is an agreed European harmonised standard, the UK could not put forward any competing national standards.”
For Eurosceptics, the plans represent a dramatic loss of sovereignty for the UK after Brexit. They warn that the UK will be forced to collect tariffs on behalf of the EU to retain alignment on regulations, effectively becoming a “rule-taker”.
It represents a significant victory for Greg Clark, the Business Secretary, and Philip Hammond, the Chancellor, who have both been pushing for the UK to stay as closely aligned to the single market after Brexit as possible.
A trade deal with the US
One of the most significant sections of the document relates to future trade deals. It makes clear that the commitment to aligning with EU regulations on goods could inhibit the UK’S ability to sign a free trade deal with the US.
It says that while it would not prevent the UK from joining the Trans-pacific Partnership – a trade deal between 11 non-eu nations including Australia, Canada and Japan – it could have significant consequences for the trade deal with the US.
It says: “A commitment to the single standards model would not be a barrier to accession to the comprehensive and progressive agreement for Trans-pacific
‘The UK could not put forward any competing national standards’
Partnership. However, it would not allow the UK to accommodate a likely ask from the US in a future trade deal.”
The admission that Britain’s ability to sign a trade deal with the US could be limited represents a significant blow to Liam Fox, the International Trade Secretary.
Downing Street refused to deny that the plans for a “single standards model” would limit the scope of a trade deal, but insisted it would not prevent the UK from signing one.
The Prime Minister’s spokesman said: “I can be clear, it is categorically untrue that we will not be able to strike a trade deal with the US.”
The European Court of Justice
Mrs May has been clear that leaving the jurisdiction of the European Court of Justice is a “red line” for her in Brexit negotiations.
However, the paper is unequivocal that the “common rule book” means that British courts must accept the jurisdiction of the EU on goods, the environment and social policy.
It states that “UK courts must follow CJEU (Court of Justice of the European Union) jurisprudence where relevant. Specifically where the UK employs a common rule book.
“Reference to CJEU will be possible for definitive interpretation of EU law in disputes. There will be a common rule book for state aid.”
The scale of the concession will infuriate Brexiteers. Boris Johnson, the Foreign Secretary, has previously said that Britain’s sovereignty was a more important issue during the EU referendum than migration in securing the Leave vote.
Migration
The paper is careful not to make any explicit commitments on migration following a series of bruising Cabinet rows. Mr Hammond and Mr Clark have pushed for Britain to give preferential treatment to EU migrants over non-eu migrants – specifically those who are highly skilled.
However Sajid Javid, the Home Secretary, is pushing to ensure that migrants from the EU are treated in the same way as non-eu migrants and subject to a visa system.
Eurosceptic ministers fear that there will be a “major climbdown” on migration as Brexit negotiations approach a crunch point in the autumn.
Eurosceptic revolt?
Despite the scale of the concessions, Eurosceptic Cabinet ministers are not expected to resign.
The Daily Telegraph understands that Tory whips are more concerned that Eurosceptics will submit the 48 letters needed to trigger a leadership contest. It comes after a stormy meeting between the Chief Whip and the European Research Group of Eurosceptic MPS earlier this week.
However one pro-european Cabinet minister suggested they would welcome a leadership challenge to “call the bluff ” of Eurosceptics. They believe Mrs May would easily have the numbers needed to face down the rebels.