Brexit - what next? Now that the the Great Withdrawal Bill has been passed
This week the final obstacle to the EU withdrawal bill was defeated. This is a win for the government. This prevents the parliament from having a meaningful vote on the final Brexit deal (or no deal as maybe the case). Essentially, this is another step towards Brexit actually happening.
As Theresa May puts it, the British Parliament can now deliver the “Brexit People Voted for”.
EU withdrawal bill
This is the bill that will implement the UK’s exit from the EU. It will repeal the EC Act 1972 and to provide legal continuity it will transpose directly all ready existing EU law into UK law. This is also known as the Great Repeal Bill.
So what’s next
The UK parliament has a number of other bills to pass – there will be no end of headlines. The next big hurdle for the access to the single market.
The UK wants to stay in the single market for goods. A single market for goods is the only way to resolve the Irish border problem and prevent disruption of manufacturers’ supply chain.
Take the Port of Dover in the UK. Every year 2 million lorries pass through this port. The majority of freight that comes through UK ports arrives on ferries via lorry, not in containers to be placed on rail flatbed.
Everything is in constant flow. Lorries cannot be stacked, and many carry livestock or perishable goods that need to get to their destination as soon as possible – many times within 24 hours. “You have two minutes to get a truck through Dover,” according to transport economist Chris Rowland. If there are delays things start backing up. There is only so much space, landside and wet-side, where vehicles and vessels can wait.
The favoured approach of the U.K. government—maximum facilitation— is dependant on technology not yet invented. This is not going to happen – so the UK will sign up to a Customs Union for Goods. Services are another matter.
What about Services?
The UK government has ruled out financial passporting. Therese May has been quite clear:
"We're not looking for passporting because we understand that it is intrinsic to the single market, which we would no longer be a member of. It would also require us to be subject to a single rulebook over which we would have no say."
So, the UK are looking for something broader. This is Cakeism (have one's cake and eat it too) in its purist form. Passporting is highly successful and the status of London as the centre of EU financial service is built on this but UK government think they can reject it and get something better.
What is looking most likely is that UK will get a similar deal to Canada. CETA has provisions on financial services but it stops well short passporting. As one EU official put it:
“Trade is easy, you check stuff at the border. Services, especially financial services, are a whole other game. You need common rules, and a common arbiter whenever there’s a legal disagreement.”
Conclusion – it does not look that good for services. There will be some services that the UK will struggle to sell into Europe. Who will lose out? – that is the €64m Brexit question.
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