17 Jan 2017

Theresa May: Brexit means leaving the single market

In the Trump-style opulence of Lancaster House, Theresa May told EU Ambassadors and other invited guests not to mess with Britain. Those pondering “punitive” measures against Britain to discourage other EU members from exiting the organisation should realise they’d harm themselves in the process.

LONDON, ENGLAND - JANUARY 17: British Prime Minister Theresa May delivers her keynote speech on Brexit at Lancaster House on January 17, 2017 in London, England. It is widely expected that she will announce that the UK is to leave the single market. (Photo by Kirsty Wigglesworth - WPA Pool /Getty Images)

The Prime Minister said there was no way the UK was staying in the Single Market. It’s been strongly implied if not pretty much said before, but she stated it baldly. The UK recognises that Freedom of Movement and the jurisdiction of the Court of Justice comes with membership so we can’t be members. But, she said, maybe there could be Single Market style terms for some sectors of the UK economy.

We could not be members of the Customs Union, she declared. A Customs Union is defined by common external tariffs and a common trade policy. She suggested Britain would like to have some sort of Associate Membership of the Customs Union or Customs Union Lite which allows us to avoid customs checks but not sign up to the tariff and trade rules.

That, one seasoned diplomat said, has “no chance whatever” of being agreed and claimed that was “a universal view across the EU.”

In phone calls this afternoon and this evening, Theresa May will have been getting a very toned down version of that. Chancellor Merkel in particular is meticulous about not getting involved in anything that smacks of negotiation until the formal negotiating period has kicked off. She is believed to have been a major impediment to any attempt to resolve the rights of EU citizens resident in the EU and UK at the end of last year.

There’s confusion amongst Labour MPs tonight after Sir Keir Starmer told the Commons Theresa May’s speech meant the UK was avoiding “Hard Brexit.” I have yet to find anyone on the opposition benches who agrees with him. Maybe he was excited that Mrs May had conceded his demand that Parliament gets a vote on the final deal. Given the alternative to the deal could be “no deal at all” that strikes some Labour MPs as a puny gain.

In his statement to the Commons just after the Theresa May speech, David Davis said he thought that there was plenty of wriggle room in the constraints on Britain to negotiate trade deals while it is still in the EU customs union and (it’s long been argued) effectively prohibited from doing so. Mr Davis told the Commons that (under the “Duty of Sincere Cooperation”) the UK could get trade talks primed and virtually ready to sign the moment Brexit happened as long as the UK doesn’t tread on EU feet, jeopardising their own interests. It sounds a bit as though the UK will be testing how far they can push this.

Theresa May had come to the very location for the April 1988 speech that Margaret Thatcher gave extolling the virtues of the Single Market, evangelising for the business access it would bring, the smashing of trade barriers. But Theresa May said British voters in the referendum deemed the price of membership, freedom of movement and submission to EU laws, too great. In the years to come we will discover the price of benefits or leaving.

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