Brexit Bites, 25 September 2017

Sep 25, 2017

Last week saw Theresa May deliver her much anticipated Brexit speech in Florence where she attempted to break the tensions in the Brexit talks. But did she succeed? In other developments, the fourth round of Brexit talks kick off today and Taoiseach Leo Varadkar travels to London to talk Brexit and the border with his UK counterpart.

Delivering in Florence?

Theresa May delivered her much anticipated Brexit speech in Florence on Friday with an aim to break the deadlock in the Brexit negotiations. But did she deliver?

The UK Prime Minister for the first time proposed that the UK would seek a transitional arrangement or in her words an “implementation period” of about two years in order to ensure a smooth and orderly Brexit after 29 March 2019.  This means that the UK would continue to have access to the Single Market and free movement of people would continue for this period. This, according to the UK, would give business and individuals time to adjust. 

She also promised that the UK would honour its existing commitments to the EU budget that it has made during the period of membership. While this isn’t viewed as an acceptance of the divorce bill, it is seen as a move to break the deadlock over the thorny issue of the financial settlement.

Specific to the island of Ireland, Ms. May said that the UK was committed to protecting the Good Friday Agreement as well as maintaining the Common Travel Area between the UK and Ireland. She also insisted that there were no plans to have physical infrastructure at the border but didn’t offer any further detail as to how the border would work.

The UK Prime Minister also pledged that she wanted EU citizens living in the UK to stay in the UK and continue enjoying the same rights as they have now.

A new trading era?

In the trade section of her speech, Ms. May ruled out membership of the Single Market or entering into a Customs Union with the EU.  She dismissed the possibility of membership of the European Economic Area and said it wasn’t in the UK’s interest to adopt a free trade agreement similar to the one agreed between the EU and Canada. Given that such agreements could restrict market access and take years to negotiate, the UK believes that it can “do so much better than this”. 

While the speech listed what the UK doesn’t want; tariffs and friction at the border, it was light on the mechanics of how such a deal would work. Ms. May said the EU need to agree on “a set of rules” for a future deal.  Given this position, perhaps the motto of no deal is better than a bad deal if off the table?

The EU reaction

Following the speech, the EU’s chief negotiator Michel Barnier said that the UK Prime Minister had “expressed a constructive spirit” and that the speech showed a “willingness to move forward”.  But he did stress that the EU have a number of questions for the UK about the implications of the proposals during the next round of negotiations which begin today. 

Mr. Barnier also highlighted that the speech did not give detail on how the UK intends to honour its commitment to protect the Good Friday Agreement in Ireland while observing the integrity of the Single Market and Customs Union.  On the proposed two year transition period, he said that the new request could be taken into account by the EU.

With the clock ticking and UK anxious to talk about the future trading relationship with the EU, there will be lots to talk about and advance during the negotiations this week.   

Brexit Shorts

  • Fourth round of Brexit negotiations get underway today in Brussels
  • Taoiseach Leo Varadkar meets Theresa May today to talk about the border post Brexit
  • Its reported that Irish Stock Exchange seeks possible alliance with another exchange in post-Brexit planning
  • Farmers in Northern Ireland call for five year transitional deal

Read all of our Brexit updates on the dedicated Brexit section of our website.