May's Brexit plan - cherry picking?
Theresa May's new Brexit plan aims to secure vital UK partnerships with the EU, including the establishment of a free trade area for goods. However, EU-negotiators have yet to comment.
On 12 July 2018, Theresa May's government released its Brexit 'white paper' regarding the future relationship between the UK and the EU. The white paper discusses the UK/EU's:
- Future economic partnership (i.e. trade, customs and borders),
- Future security partnership (i.e. common policies on foreign, defence, security, justice and home affairs), and
- Future 'Cross-cutting' and other cooperation (i.e. protection of personal data, access to waters (fishing), cooperative accords for science, innovation etc.).
A key highlight of the white paper includes an explicit intent of the UK to leave the Single Market and Customs Union.
As previously detailed in one of our Brexit Case Studies, the UK's departure from the Single Market will e.g. limit the free movement of goods, capital, services and labour. A departure from the Customs Union will - on its face - result in the establishment of customs borders between the UK and EU.
To counteract the adverse trade implications of these departures, the white paper suggests the establishment of a free trade area for goods. The proposed free trade area would, as explained, ensure the avoidance of customs and regulatory checks at borders and ensure that businesses on both sides could continue to operate through their current value and supply chains.
It is less likely that EU will accept such arrangements and beneficial treatment of the UK, as the proposal includes rights of the UK, which generally are reserved for EU members only.
Kromann Reumert's recommendation
The white paper is an ambitious proposal from the UK and critics have already accused it of 'cherry picking' rights, which are reserved for EU members only. However, with time running out and a real risk that no agreement will be reached by 30 March 2019, the options for both parties are decreasing.
We recommend that our clients continue to follow the negotiations closely as they evolve and that they prepare for a no-deal scenario by 30 March 2019.
We would be happy to elaborate further.
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