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Brexit Update: EU Agrees on Future Trade Strategy

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There have been updates on what trade negotiations between the UK and the rest of the world will look like post Brexit.

Today, Prime Minister Theresa May has called for a “new dynamic” during the next stage of negotiations. She is optimistic that a deal can be reached which will benefit both Britain and Europe.

EU negotiators have already accepted the UK’s demand to pursue an independent trade policy while remaining inside the customs union and single market during the transition period from 30 March 2019 to the end of 2020.

Find out more below.

Independent Trade Policy

At the start of the year, the Secretary of State for International Trade said that the UK Government wants to maintain British businesses’ “guaranteed rights to access global public procurement markets worth approximately £1.3 trillion per year”.

On 15 March, it was announced that the latest draft of the transition deal leaves Britain free to sign trade deals during the Brexit transition period. The Government will not be required to seek permission from the European Union.

It appears that both sides of the Brexit divorce are now closer to agreeing on a transition package deal with Germany’s Brexit co-ordinator, Peter Ptassek, stating that negotiations were running smoothly, with a “lot of progress” being made.

World Trade Organisation

As well as the UK being able to sign trade deals during the transition period, the EU has also agreed that the UK does not need to defer to Brussels at the World Trade Organisation in Geneva. Instead, the UK can participate “in its own right”, however,, it must not contradict EU policies. This is crucial to the realisation of International Trade Secretary Liam Fox’s ambition for the UK to sign trade deals with up to 70 countries during the transition period.

Irish Border Negations

Both Westminster and the 27 EU Member States (EU27) want to find a solution that will keep Northern Ireland’s border with the Republic open without border checkpoints as it is at present. This is challenging, given that, post Brexit, the Irish border will be the land boundary between the UK and the EU.

The EU27 made it clear that reaching a deal on the Irish border was crucial to all future agreements with the UK including the vision of the “wide-ranging and ambitious” free trade deal envisaged in the seven-page blueprint for a future deal between the EU and UK endorsed by EU27 leaders at today’s summit in Brussels.

It was expected that the EU27 would approve a draft deal on Britain’s transition to Brexit, opening the door for talks on trade. This morning, President of the European Council, Donald Tusk, announced a Brexit deal was done.

Theresa May told the EU27 leaders: “We have the chance now to create a new dynamic in the talks, to work together to explore workable solutions on Northern Ireland, on our future security co-operation and in order to ensure the future prosperity of all our people.”

Keep following the BiP Solutions blog for news, analysis and commentary on public procurement and Brexit.

EU Referendum: The Ins and Outs for Business

EU Referendum

Rely on facts not feelings

Are you ready to vote in the EU referendum on 23 June? The latest YouGov poll showed significant support for both sides with 13% of people still undecided.

Professionals across the country are wondering what the vote will mean for their businesses, jobs and bank balances and there is no shortage of opinions in the newspapers and on TV.

Unfortunately, these tend to be biased towards one side or another which is why the UK’s leading procurement service provider, BiP Solutions, is launching its free White Paper, EU Referendum: The Ins and Outs for Business.

The White Paper examines the referendum and its potential implications for UK exports, trade arrangements, business finance, procurement legislation and jobs – all of which will affect the country’s livelihood.

Here’s a sneak peek at the first two chapters of EU Referendum: The Ins and Outs for Business – covering Exports and Trade Agreements.

At the forefront of the referendum debate is the issue of exports. Brexit leaders argue that the EU membership fees paid by the UK outweigh the UK gains from exports to the European Economic Area (EEA). However, HM Treasury’s latest European Union Finances statistics appear to contradict this argument.

These figures show that in 2015 EU membership cost the UK £8.4bn (net sum). This cost though was outweighed by the value of UK exports to the EEA in 2015, which reached £133.9bn (HMRC UK Overseas Trade Statistics December 2015).

This trend is, however, not reflective of the wider UK export picture; as the latest (February 2016) Office of National Statistics UK Trade Statistical Bulletin shows, between November 2015 and February 2016, UK exports to non-EEA countries totalled more than those to EEA countries (£36bn compared to £33bn).

This highlights the opportunity for greater UK trade beyond the European Union, and shows the appeal of a Brexit in which the UK could form autonomous international trade partnerships, without having to negotiate with other EU members.

Another pro-Brexit argument is that, should it leave the EU, the UK could re-negotiate a deal that allowed it to trade with the EEA without having to adhere to the EU Public Contracts Regulations, which are said to cost UK businesses £33.3bn annually to implement.

However, pro-EU campaigners highlight current European law stipulates that to benefit from European Single Market trade rates countries must adhere to EU regulations.

This means that should the UK cease to do so, it would have to pay more to trade with EEA countries. Establishment of alternative trade partnerships is a challenge that could create economic instability; however, it could also create the opportunity to forge new markets and procurement practices.

Read more about the economic implications of the EU referendum, with EU Referendum: The Ins and Outs for Business.

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