EU, UK Reach Draft Brexit Deal

by Samuel Abasi Posted on November 13th, 2018

London, UK : The UK and the European Union negotiators have finalized the text for a draft deal for Britain’s departure from the bloc, Prime Minister Theresa May’s office said on Tuesday.

Negotiators for the EU and the UK have finally struck a draft deal on the conditions of the British divorce from the bloc. But now Theresa May has to convince her Cabinet and Parliament to back the deal.

May has called a Cabinet meeting for tomorrow, preceded on Tuesday evening by a series of one-on-one meetings with Cabinet ministers, to discuss the terms of the deal.

Ministers were individually briefed about the deal’s outline on Tuesday evening, ahead of a special cabinet meeting on Wednesday to sign off the text, Downing Street said.

“Cabinet will meet at 2:00 pm (1400 GMT) tomorrow to consider the draft agreement the negotiating teams have reached in Brussels, and to decide on next steps,” it said.

The text reportedly resolves the Irish border issue, a fundamental sticking point in negotiations.

May faces an uphill battle getting politicians to agree to the deal, with several warning they would vote against it if it was not to their liking.

Brexit zealot Boris Johnson, who resigned as foreign secretary in July, said he would not support the deal.

“I think that the right thing for them (ministers) to do is to advise the prime minister that this would not be acceptable,” he told reporters.

“It patently fails to fulfill the mandate given by the British people in (the EU referendum) in June 2016.”

The conservative Northern Irish DUP party, which props up May’s minority government, said it would wait and see the actual text of the deal, which is reportedly hundreds of pages long, before deciding how it would vote.

Jeremy Corbyn, leader of the opposition Labour Party, said: “We will look at the details of what has been agreed when they are available. But from what we know of the shambolic handling of these negotiations, this is unlikely to be a good deal for the country.”

Hard-line Brexit fanatic Jacob Rees-Mogg said: “I hope the Cabinet will block it and if not, I hope Parliament will block it. I think what we know of this deal is deeply unsatisfactory.”

France’s European Minister Nathalie Loiseau confirmed that the sides had finally made “substantial progress”.

“We are going to look very carefully at the draft agreement. We want a good text that scrupulously respects the interests of the EU,” she wrote on Twitter.

The pound rallied on news of a deal, rising 1.5 per cent against the dollar to $1.3038.

But May faces pressure from pro-Brexit Cabinet members and lawmakers not to agree to an arrangement that binds Britain to EU trade rules indefinitely.

Former Foreign Secretary Boris Johnson, a staunch Brexiteer, said the deal was unacceptable and Cabinet ministers should “chuck it out.”

May also faces growing opposition from pro-EU lawmakers, who say her proposed Brexit deal is worse than the status quo and the British public should get a new vote on whether to leave or to stay.

If there is no agreement soon, U.K. businesses will have to start implementing contingency plans for a “no-deal” Brexit — steps that could include cutting jobs, stockpiling goods and relocating production and services outside Britain.

Even with such measures in place, the British government says leaving the EU without a deal could cause major economic disruption, with gridlock at ports and disruption to supplies of foods, goods and medicines.

On Tuesday, the European Commission published a sheaf of notices outlining changes in a host of areas in the event of a no-deal Brexit. They point to major disruption for people and businesses: U.K. truckers’ licenses won’t be valid in the EU, British airlines will no longer enjoy traffic rights, and even British mineral water will cease to be recognized as such by the EU.

The EU said Tuesday it was proposing visa-free travel for U.K. citizens on short trips, even if there is no deal — but only if Britain reciprocates.

Meanwhile, official figures suggest Brexit is already having an impact on the British workforce.

The Office for National Statistics said the number of EU citizens working in the country — 2.25 million– was down 132,000 in the three months to September from the year before. That’s the largest annual fall since comparable records began in 1997.

Most of the fall is due to fewer workers from eight eastern European countries that joined the EU in 2004.

Jonathan Portes, professor of economics at King’s College London, said the prospect of Brexit “has clearly made the U.K. a much less attractive place for Europeans to live and work.

EU proposes visa-free travel for Britons after Brexit

The European Union’s executive proposed on Tuesday that Britons be allowed to visit the bloc without visas after Brexit and stepped up preparations in case of a no-deal divorce.

Speaking after the European Commission sat in Strasbourg, deputy head Frans Timmermans said a Brexit deal with Britain was the bloc’s preferred solution.

“Very intense negotiations are ongoing. It is clear that although we are making progress, we are not there yet,” he told a news conference.

“We also discussed a number of issues related to our no-deal planning. You have to do that anyway. We are working very hard for a deal and let’s be clear that is by far our preferred option. But we need to prepare for all options.”

The Commission said Britons would need no visas for stays of up to 90 days.

“In the scenario where the UK leaves the EU without a deal, this would apply as of 30 March 2019. If a deal is reached, however, it would apply as of the end of the transition period,” the Commission said in a statement.

“This proposal is entirely conditional upon the UK also granting reciprocal and non-discriminatory visa-free travel for all EU member states, in line with the principle of visa reciprocity,” it added.

This would need to be approved by the European Parliament and EU member states to take effect.

Timmermans spoke after EU Brexit negotiator Michel Barnier updated the European Commission on divorce negotiations with Britain, which British Prime Minister Theresa May said were “in the endgame” but remain stuck over the Irish border.

EU diplomats did not have high hopes for a breakthrough this week that would allow for a summit of national leaders to rubber-stamp a Brexit deal this month.

While a deal is possible in December, delays raise the risk of the most damaging scenario of Britain leaving the EU next March without agreements in place to mitigate its impacts.

We Have a Deal. Now What?

The tricky bit starts here as the divorce deal goes to lawmakers.

There’s a real chance that if the deal is voted down, the country will crash out of the bloc into a legal limbo that would snarl trade and freeze up markets. Free trade between Britain and the EU will give way to basic World Trade Organization tariffs and become subject to border checks. Delays would be so bad that the government has plans to turn a major highway near the Port of Dover into a holding zone for trucks. Bottlenecks could bring shortages of everything from food to drugs and manufacturing components. Financial contracts would also risk being void and there’s a question mark over how derivative trades would be cleared.

The deal — once it’s through Parliament — brings some relief to London’s financial hub because the grace period buys them time. But because of the way the talks were structured, there’s still not much clarity about how banks will operate in the future. What is known is that there’s a big downgrade from the status quo. That’s to be expected as the U.K. had long dropped demands for close integration. U.K. banks will have to use the same or similar regime to the one U.S. and Japanese banks use now — it’s called equivalence and it has lots of pitfalls. The full extent of the changes will emerge in the final trade agreement, which could be years from now.

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