Theresa May’s ‘three baskets’ amounts to cherry picking says EU
17, Mar 2018
Industry News
Teresa May’s much vaunted speech on 2 March brought at last some much needed realism regarding Brexit. This includes the realisation that there will be a “significant reduction” of market access.
However, the speech includes whole baskets of cherries freshly picked from the tree. In practice, the UK now banks on three ‘baskets’: one regarding trade with no regulatory divergence such as car parts as part of a supply chain, this would include competition laws, another with “managed divergence” such as the environment or animal welfare and a third with full divergence, which would include agriculture and fisheries.
This formulation and the aim of reciprocity of regulatory standards is illusionary and is rejected by the EU who will not compromise its decision-making autonomy. One cannot have ‘its cake and eat it”, in other words, leave the club, enjoy its benefit and make the rules – in EU speak “have the same rights and enjoy the same benefits”. This certainly applies to the international meat trade.
We have little to gain from regulatory divergence (meaning in practice further gold-plating of environment and animal welfare legislation) and lots to lose in terms of trade.
The European Council, the instance representing the EU-27 governments, gave its opinion on 7 March. This important document shows glimpses of the end game. As press commentator Martin Schulz says “the likelihood is that the UK will exit on terms laid down, in details, by the EU”.
On a very welcome note for British meat exporters, potentially exposed to punishing tariffs, the draft guidelines clearly state that no tariff should apply to the trade of goods between the UK and the EU, an opinion also expressed in Mrs Mays’ speech. The document talks of a new Free Trade Agreement and dismisses frictionless trade, meaning the return of veterinary and other controls at borders’ posts.
Coming back to the ‘three baskets’ theory, one must mention the Brexit report of the Institute of Directors that endorses such solution. Slightly different from Government’s views, it discounts a trade agreement for agricultural commodities, probably perceived as too complex to negotiate. This would be indeed a vexing outcome for our industry.
Of course, despite the welcome new clarity on Brexit, everything remains in the realm of the possible. For instance, the intractable Irish border issue may still derail negotiations. For the moment, we can glimpse what the future outside the EU will look like.
The views expressed in this article may not reflect the policies of the BMPA
