The Prime Minister’s realisation that Britain needs a transitional trading deal with the EU is welcome, but more clarity is required, Pat McFadden MP of the Open Britain campaign said today.
Speaking at the CBI conference earlier today, Theresa May said “people don’t want a cliff edge”, and added that this issue would be part of “the negotiation that we are undertaking with the European Union.”
A ‘cliff edge’ would involve Britain leaving the EU at the end of the Article 50 period without having agreed a new trading relationship with the EU. This would mean Britain would immediately leave the Single Market and the Customs Union, meaning higher tariffs, new regulatory barriers to trade with Europe, and a loss of the free trade agreements the EU has signed on Britain’s behalf with over 50 third countries.
This weekend, trade bodies and business leaders including the EEF, City of London Corporation, techUK and ICC UK spoke up about the need for a transitional deal, pointing to research by Open Britain showing that, on average, it takes six years for the EU to negotiate and ratify free trade agreements, meaning it is unrealistic to expect a new UK-EU deal to be completed within just two years.
Commenting, Pat McFadden MP, leading supporter of the Open Britain campaign, said:
“It is good that the Prime Minister understands the dangers of a cliff edge for the economy during the Brexit negotiations.
“Some within her party seem to be pushing for a hard Brexit whatever the economic consequences. However, without a transitional agreement between leaving and agreeing the future arrangements, the danger is that the UK would fall out of the single market and customs union, incurring tariffs for our manufacturing industry, losing passporting rights for our financial services, and posing threats to our agriculture. None of that is good for jobs or living standards.
“A transitional agreement is therefore vital, but we need much more clarity about what the Government is aiming for. With the Chancellor warning of the dangers of uncertainty, continuing with vagueness is simply going to make it harder for investors and job creators.”
Speaking to the CBI this morning, the Prime Minister said: “Obviously, as we look at the negotiation we want to get the arrangement that is going to work best for the UK and the arrangement that is going to work best for business in the UK. And I’m conscious that there will be issues that will need to be looked at…People don’t want a cliff edge, they want to know with some certainty how things are going to go forward…That will be part of the work that we do in terms of the negotiation that we are undertaking with the European Union.”: https://www.theguardian.com/business/2016/nov/21/government-working-hard-avoid-brexit-cliff-edge-business-theresa-may-cbi.
The story about EU FTAs is here: http://www.open-britain.co.uk/trade_bodies_and_business_leaders_warn_of_cost_of_six_year_eu_trade_talks_and_want_transition_deal