UK ‘work­ing on two ver­sions’ of cus­toms pact, says Chan­cel­lor Hammond

Financial Mirror (Cyprus) - - FRONT PAGE -

UK min­is­ters will set out their vi­sion of fu­ture trad­ing re­la­tions with the EU in the com­ing weeks, Chan­cel­lor of the Ex­che­quer Philip Hammond said on Thurs­day.

Speak­ing at the Euro­pean Busi­ness Sum­mit, Hammond said that min­is­ters would set out more de­tails on its cus­toms plans in the com­ing weeks, adding that they were “work­ing on two ver­sions of a cus­toms part­ner­ship”.

But he ad­mit­ted that both op­tions were still “works in progress” but would “min­imise fric­tion… and re­solve the North­ern Ire­land bor­der is­sue”.

Ar­ti­cle 50 talks on the UK’s for­mal exit from the EU have made lit­tle progress since De­cem­ber, when EU and UK ne­go­tia­tors con­cluded agree­ment on a fi­nan­cial set­tle­ment worth up to GBP 39 bln, and a tran­si­tion pe­riod dur­ing which the UK will re­main in the Sin­gle Mar­ket un­til De­cem­ber 2020.

The dead­lock is largely a re­sult of divi­sions among Theresa May’s min­is­ters on what re­la­tion­ship the UK will seek with the EU’s Cus­toms Union and to avoid a hard bor­der be­tween North­ern Ire­land and the Repub­lic.

“Peo­ple will recog­nise that there is a range of views in the UK on th­ese vi­sions,” con­ceded Hammond, who cam­paigned for a Re­main vote in June 2016.

The Bri­tish fi­nance min­is­ter said that min­is­ters would also set out plans for the UK to main­tain “a re­la­tion­ship with the EU agen­cies cov­er­ing chem­i­cals, phar­ma­ceu­ti­cals and aero­space… seek a be­spoke part­ner­ship on fi­nan­cial ser­vices.”

But he at­tempted to put pres­sure on EU lead­ers, re­mark­ing that “a deal will only be pos­si­ble if both sides want it.”

“I fear that many see Brexit as a chal­lenge for the Brits to sort out. This has to be two-way con­ver­sa­tion. It can’t just be about Bri­tish pros­per­ity, it has to be about our Euro­pean part­ners. Can­didly, if Euro­pean lead­ers don’t want it, then it won’t hap­pen.”

“The pic­ture is a bit blurred,” said Markus Beyrer, direc­tor gen­eral of Busi­nessEurope.

“Busi­ness wants a deal, but we don’t want it at the ex­pense of the sin­gle mar­ket. Time is run­ning,” he added. That scep­ti­cism is not only found in Brus­sels. A re­port pub­lished on Thurs­day by the House of Com­mons Ex­it­ing the EU com­mit­tee stated that the UK would prob­a­bly have to re­main in the EU’s Cus­toms Unions af­ter its for­mal tran­si­tion pe­riod ends.

MPs added that it was “highly un­sat­is­fac­tory” that min­is­ters are still yet to agree what kind of trad­ing and cus­toms ar­range­ments they wish to seek in the Ar­ti­cle 50 ne­go­ti­a­tions.

“We are rapidly run­ning out of time to get new trade and cus­toms ar­range­ments in place,” said Com­mit­tee Chair Hi­lary Benn.

“Given that min­is­ters are in­di­cat­ing that nei­ther of the two op­tions be­ing dis­cussed are likely to be ready by De­cem­ber 2020, when the tran­si­tion pe­riod ends, the UK will in all like­li­hood have to re­main in a cus­toms union with the EU un­til al­ter­na­tive ar­range­ments can be put in place,” he added.

May’s min­is­ters are yet to agree on whether to of­fer a ‘max­i­mum fa­cil­i­ta­tion’ pro­posal nor the new cus­toms part­ner­ship. How­ever, UK min­is­ters have con­ceded that nei­ther scheme is likely to be ready be­fore the end of the agreed 21-month tran­si­tion/im­ple­men­ta­tion pe­riod.

“Such an ex­ten­sion will be the only vi­able op­tion,” said MPs.

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