UKandEU's Reland: The post-Brexit relationship has been quietly maturing from petulance to managing divergence
The UK government has long been on the hunt for Brexit opportunities: demonstrations of how the country can remake and improve its regulations outside the EU. This was indicative of a political culture, embedded by Boris Johnson’s government, that treated Brexit as a zero-sum game.
Leaving the bloc was synonymous with becoming the “best-regulated economy in the world”. The fundamental (but now abandoned) premise of the flagship retained EU law bill, designed to sweep away a broad swath of EU-era regulation, was that inherited EU regulation is intrinsically unsuited to the UK — unwanted barnacles encrusted on the British ship of state. But where the Johnson government saw bountiful opportunities, businesses saw mostly costs.
Regulatory alignment is generally seen as preferable to divergence because it simplifies cross-border trade: a coalition of businesses and political figures is now calling on the UK to systematically align with the EU to minimise such costs. Yet it appears that, under Prime Minister Rishi Sunak, a different mindset is emerging. A third way is starting to open between alignment and divergence — one that treats the UK and EU as constructive competitors rather than direct adversaries. This seeks common ways to manage the negative impacts — and amplify the positive. In our latest tracker of regulatory changes since Brexit, we call it managed divergence.
One way this is happening is through new structures for co-operation. Last month, the UK and EU signed a memorandum of understanding on financial services. Even though the UK is still seeking to diverge in some areas, such as insurance, they are now working together to avoid unintended consequences and address other challenges. For example, similar but separate agendas on sustainable finance could damp trade if they result in technical differences. Ironing out those wrinkles could allow the UK and EU to co-ordinate and exert joint international leadership....
more at FT
© FT plc
Key
Hover over the blue highlighted
text to view the acronym meaning
Hover
over these icons for more information
Comments:
No Comments for this Article