The process towards Brexit: Theresa Mays 10 deals to strike Adrian - - PowerPoint PPT Presentation

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The process towards Brexit: Theresa May’s 10 deals to strike

Adrian Gahan Managing Director, Sancroft 23 November 2016

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Deal 1: A deal within the Conservative Party

Imperialists (Davis & Fox)

• Exaggerated sense of unilateral British power
• Economic liberals (but only understand trade in goods)
• Sovereignty, not immigration
• Insufficient attention/understanding of politics in continental Europe

Nationalists (May & Timothy)

• Economic nationalism- Govt picking winners (Nissan)
• Political populism – smash UKIP and Labour
• Immigration controls before trade

ALBINOs (Hammond & Clark)

• A Little Brexit in Name Only
• Wish to avoid WTO cliff edge

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Deal 2: A deal with Parliament

• Bluff called by High Court judgment
• Govt now needs to bring Brexit strategy to

Parliament

• Reluctance is not about negotiating tactics
• Govt currently does not have a Brexit

strategy

• Parliament will not block Article 50

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Deal 3: Article 50 The Divorce Settlement

• Article 50: “By end of March 2017”
• Two year deadline unlikely to be extended

(2019 EU elections & 2020 EU budget)

• Will only cover the basics:
• EU/UK citizen reciprocal rights
• budget contributions
• EU institutions in UK, staff, pensions
• No formal talks on long term deal until out

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Deal 4: Future UK/EU economic relationship

5 Source: Deutsche Bank, July 2016

Expect ratification 2026-2030 (if ever?...)

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Deal 5: Interim UK/EU Deal (2019-2025?)

• Likely 8-10 years between exiting EU & new trade

agreement

• What do we do for the 2020s? WTO terms?
• Or ‘temporary cover’ with an interim deal?
• To be negotiated simultaneously with Article 50
• How much of single market will UK continue to

have access to post March 2019?

• Budget contributions? CAP/CFP? ECJ rulings?

Free movement restrictions? This is where you should be focusing your attention

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Deal 6: WTO Deal

• UK already a member of WTO, but unable to

submit own schedule until UK portions agreed with EU

• First agree with EU MS on UK schedule

(tariffs/quotas/subsidies)

• Then need approval of 162 members. Each

theoretically has a veto

• No trade deals until schedule agreed –

timeline & process as yet unclear

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Deal 7: Bilateral Trade Deals

• 53 trade deals we currently enjoy via EU
• Cannot sign any deals until exited EU
• Countries willing to strike UK deal while

EU trade relationship unclear?

• Will then take 8-10 year negotiations per

deal.

• First UK bilateral trade deals early 2030’s?

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Deal 8: Co-operation on CFSP/J&HA

• UK in strong bargaining position – stronger

since Trump win

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Deals 9 & 10: Scotland and Northern Ireland

• Economic & social relationship between NI & RoI
• Brexit in breach of Belfast Agreement?
• Second Scottish independence referendum?

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Summary: Ten deals to strike

1. A deal within the Conservative Party

• 2. A deal with Parliament
• 3. Divorce settlement (Article 50)
• 4. Future UK/EU economic relationship
• 5. Interim UK/EU deal
• 6. WTO deal
• 7. Bilateral trade deals
• 8. UK/EU agreement CFSP/J&HA
• 9. Deal with Scotland
• 10. Deal with Northern Ireland

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Points to remember

1. The Govt does not have a plan. So you need to present them with one.

• 2. Do not allow them to use you for spin

3. Beware the cliff edge in 2019

• 4. Push for the principle of an interim deal

5. Push for what you want to see for your sector in that interim deal

• 6. New trade deals are not going to bail you out until the

2030s, if ever. 7. Any trade deal struck before then will be political theatre – beware cosmetic trade deals secured simply to get runs on the board

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The winners & losers of globalisation

Explaining Brexit and Trump in one graph

12 Source: Branko Milanovic , 2012

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Adrian Gahan Managing Director Sancroft 46 Queen Anne’s Gate London SW1H 9AP adrian.gahan@sancroft.com Tel: 0207 9607905

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