Tag Archives: deal

EU-UK «ambitious partnership »

Michel Barnier (pictured) , the European Commission’s Chief Negotiator, sets out points of convergence and divergence following the first round of negotiations. Here is the translation from original in French:

“This new negotiation aims to build – or rebuild – an ambitious partnership, after Brexit, with this great friendly and ally country that is the United Kingdom.

We must rebuild everything, on new legal bases.

So we started this work in a serious and constructive way:

       with David Frost, who leads negotiations on the British side;

       and with the two negotiating teams.

These teams, exceptional by their size and their competence, are made up of experts representing:

       on the British side, the various ministries and departments concerned, and

       on the Union side, 22 Directorates General of the European Commission, the External Action Service, and the General Secretariat of the Council.

I would like to sincerely thank all of these people for their work, their professionalism and, above all, for the cordial and constructive spirit they have shown over the past few days.

And I would like to personally thank President Ursula von der Leyen and her cabinet for the trust and support they have shown me”.

EU27 defends Brexit deal as “best compromise”

Westminster voting down the proposed by the Theresa May government agreement with EU27 caused the range of reactions from the blocs’s institutions, and major players, warning about the catastrophic consequences of the no-deal Brexit for communities from both sides of the Channel.

The deal on the table respects the UK’s red lines and protects our citizens and companies from the surreal possibility of a no-deal Brexit. The Government should swiftly provide clarity on the next steps. The time for one-liners has run out, we need concrete choices”,  Manfred Weber MEP (Germany, EPP) said. Although he admitted that the UK departing without an agreement is becoming one of realistic scenarios.

The EU top Brexit negotiator Michel Barnier said EU is ‘fearing more than ever’ a chaotic departure of UK from bloc.

It is not up to me, as a humble Belgian, to lecture Brits on what to do, but I think it’s time the national interest overtakes narrow party politics & cross party politics redefines the red lines imposed by hardliners in the Conservative party. We are ready for this” said Guy Verhofstadt (Belgium, ALDE).

“Real” risks of returning violence in Ireland

In spite of the absence of a proposal by any political party to establish conventional border structure dividing the island of Ireland,  Taoiseach Leo Varadkar has considered necessary to give European leaders his warning of related risks of returning to a hard border.

Speaking at a press conference while concluding Brexit Summit in Brussels Mr Varadkar said he decided to make clear that the Irish Government was not exaggerating its concerns about the consequences of a no deal for Northern Ireland and the erection of a border.

Taoiseach described his vision using recent Irish Times, which reminded of the bombing of a customs post in 1972 and which Mr Varadkar showed to European leaders at dinner, as “a useful prop to demonstrate to all the European leaders the extent to which the concerns about the re-emergence of a hard border and the possibility of a return to violence are very real”.

“I just wanted to make sure that there was no sense in the room that in any way anyone in the Irish Government was exaggerating the real risk of a return to violence in Ireland,” Mr Varadkar said.

 

EU leaders call Barnier to continue effort

At the European Council (Art. 50) working dinner on 17 October 2018, EU27 leaders reviewed the state of the negotiations with the UK.

Ahead of the meeting, Prime Minister May updated the leaders on the UK perspective of the negotiations.

EU27 leaders reaffirmed their full confidence in Michel Barnier as the negotiator and their determination to stay united. They also noted that, despite intensive negotiations, not enough progress has been achieved.

The European Council (Art. 50) called on the Union negotiator to continue his efforts to reach an agreement in accordance with previously agreed European Council guidelines.

The leaders declared their readiness to convene a European Council, if and when the Union negotiator reports that decisive progress has been made.

Impact of Brexit on financial services

Services industries, including professional, scientific, administrative and technical services are likely to be the hardest hit by a ‘no deal’ Brexit, with up to £140bn and 2.5million jobs vulnerable or at risk across all UK industries, research by The UK in a Changing Europe finds.

The research also found that financial services is one of the least vulnerable sectors to Brexit as much of the sector is already highly globalised and therefore displays a low dependence on EU markets. Indeed, even when weighing the low Brexit exposure levels of the financial services, with their overall contribution to the UK economy, the effect on the UK’s loss of EU market access appears to be almost entirely negligible.

Professor Raquel Ortega-Argilés, and her team from The UK in a Changing Europe, examined the extent to which British industries depend on trade with the EU.

 An analysis of global trade patterns across 43 countries and 54 industries allowed the researchers to calculate a Brexit risk-exposure index. They did this for each UK sector under a ‘no deal’ Brexit scenario in which much of UK trade faces severe disruptions and impediments, and under a ‘hyper-competitive’ scenario in which UK industries can rapidly re-shore all imported activities from the EU back to domestic production.

 An industry’s exposure to Brexit is defined as its employment (or value added) that crosses a UK-EU border at least once, embodied in a product or service. Exposure levels indicate how much the industry has to restructure its role in supply chains (via re-shoring stages of production and exploiting non-EU markets, etc.) to mitigate the value added and employment losses due to reduced post-Brexit trade with the EU. Such exposure levels indicate which industries are likely to be hit hardest by a ‘no deal’ Brexit and which ones will most likely remain virtually unaffected.

In 15 out of 54 industries, more than 20% (and up to 36%) of economic activity is at risk from Brexit in industries such as fisheries, chemicals and motor vehicle manufacturing.

 In the ‘no deal’ Brexit scenario the results show:

  • More than 2.5 million jobs are at risk of the trade effects of Brexit
  • Annually, almost £140 billion pounds of UK economic activity is directly at risk because of Brexit
  • Many important manufacturing and primary industries are at risk of Brexit, but so are many service industries, and not just the financial services industry
  • Many of these services are not only exported directly to EU countries, but also sell intensively within domestic supply chains to UK manufacturing firms exporting to the EU
  • Workers in the jobs at risk are on average slightly more productive than the average British worker – so Brexit is likely to exacerbate the UK’s productivity problems.

 Professor Raquel Ortega-Argilés, said: “The results suggest that while financial and manufacturing services are very important, the UK Government’s emphasis on securing special UK-EU agreements for City-based financial markets may be misplaced, and that emphasis should be placed on helping the other much more exposed sectors which do not have strong lobbying power.

“The sectors that are going to be hardest hit by a no deal Brexit are a range of services industries. They are parts of the economy who don’t lobby Westminster and rarely get the attention they need.”

 Research led by Dr Meredith Crowley’s team, from The UK in a Changing Europe, found in a `no deal’ scenario, where trade reverts to WTO rules, one-third of UK exports to the EU will remain tariff-free. However, one-quarter of UK exports (£47 billion) into the EU will face high tariffs and/or the risk of restrictive quotas or antidumping duties. Moreover those exports facing the high tariffs and restrictive quotas are in high value-added sectors.

 Dr Crowley conducted a detailed analysis of over 5,000 tradable goods and identified export industries that are at greatest risk of high tariffs.

 In the ‘hyper-competitive’ case the results of Professor Ortega-Argilés and her team suggest an increase in UK employment and GDP of approximately one third of the potential losses in the ‘no deal’ scenario, so evidently the balance of UK Brexit-related risks are very much on the downside. Current UK productivity figures suggest that most of the UK economy is nowhere near being hyper-competitive.