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Transition to be agreed with Brexit trade deal - May
October 23, 2017 / 8:17 AM / 2 months ago

Transition to be agreed with Brexit trade deal - May

LONDON (Reuters) - British Prime Minister Theresa May signalled on Monday that any Brexit transition deal would be put together as part of a wider trade agreement - potentially stripping companies of the time they need to prepare to leave the European Union.

A view of the City of London, Canary Wharf and the Shard, Britain July 7, 2017. REUTERS/John Sibley

International businesses have become increasingly vocal in recent weeks over fears that Britain could crash out of the world’s biggest trading bloc without a deal, sending shockwaves through global markets and fracturing intricate supply chains.

May has promised to retain full access to the EU’s single market for two years after Brexit to limit the disruption for companies. But she told parliament on Monday the full terms of any transition, or implementation period, would be agreed at the same time as the country agrees a new trade deal.

That needs to be completed this time next year, just six months before Britain is due to leave the EU in March 2019.

“An implementation period is about a period which is adjusting to the future relationship,” May said. “That’s the basis on which I put it forward to the European Union, and that’s the basis on which we’ll be negotiating an agreement on it.”

May’s spokesman said the government position was as set out in the prime minister’s speech in Florence, responding during a daily briefing session to repeated questions about when companies would see a final transition deal.

“We’re looking to finalise a deal all in one go,” her spokesman said.

Several opposition lawmakers also asked the prime minister to clarify what the stance would mean for businesses.

Concern over Britain’s future trading relationship has been growing for weeks. The country’s five leading business organisations warned on Monday that companies would start moving jobs and investment out of the country if they do not get a transition deal soon.

An anti Brexit protester adjusts his EU flags outside the Houses of Parliament in London, Britain October 19, 2017. REUTERS/Peter Nicholls

In a draft letter to Brexit minister David Davis, they warned that time was running out for companies that need to make investment decisions at the beginning of next year.

“Agreement (on a transition) is needed as soon as possible, as companies are preparing to make serious decisions at the start of 2018, which will have consequences for jobs and investment in the UK,” the draft letter from the five groups says, according to a person familiar with the situation.

“And the details of any transitional arrangement matter: the economic relationship the UK and EU have during this time-limited period must match as close as possible the status quo.”

The letter is due to be sent from Britain’s five leading business groups, the CBI, the British Chambers of Commerce, the Institute of Directors, the Federation of Small Businesses and the manufacturing group EEF.

Their intervention follows a tweet from the boss of Goldman Sachs, Lloyd Blankfein, who said last week that he was looking forward to spending more time in Frankfurt after Brexit.

“Just left Frankfurt,” he said. “Great meetings, great weather, really enjoyed it. Good, because I’ll be spending a lot more time there. #Brexit,” he tweeted.

London Mayor Sadiq Khan, a member of the opposition Labour Party who campaigned to remain in the EU, said Blankfein’s comment reflected a wider thinking in the business community and warned that others could follow suit.

“He’s articulating publicly what many CEOs and investors who love working in London have been saying privately, which is that unless they have certainty about what happens after March 29, 2019, they have got to make a plan B,” he said.

“He’s not bluffing. When I speak to businesses each day, they’re not bluffing.”

Editing by Larry King

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