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10 December 2017

BBC: David Davis wants 'Canada plus plus plus' trade deal

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Brexit Secretary said the UK wants to secure a post-Brexit free-trade deal with no tariffs and if negotiators fail to secure it, then the UK would not pay its divorce bill. Davis stressed that the deal to move to the next phase of talks was a "statement of intent" and not "legally enforceable".

He described it as "Canada plus plus plus" - a reference to the free trade deal struck between Canada and the EU.

But unlike the Canada deal, he wants financial services included in the tariff-free area, he told Andrew Marr. [...]

The Conservatives claim this would "mean billions of pounds going to the EU in perpetuity" and the UK "being forced to obey rules over which we have no say".

Canada's deal with the EU, signed last year, removes the vast majority of customs duties on EU exports to Canada and Canadian exports to the EU but without paying for access to the single market.

'Statement of intent'

But Mr Davis said he wanted a "bespoke" deal with the EU and was aiming for "overarching" agreement with no tariffs, that included the service industries - which are a key part of the British economy.

Referring to some of the EU's trade deals, he said: "We'll probably start with the best of Canada, and the best of Japan and the best of South Korea and then add to that the bits that are missing which is the services."

He said the odds of the UK exiting without a deal had "dropped dramatically" following Friday's joint EU-UK statement in Brussels.

But he stressed that the deal struck by Theresa May on Friday to move to the next phase of talks was a "statement of intent" and not "legally enforceable".

And if the UK failed to get a trade deal with the EU then it would not pay its divorce bill, which the Treasury says will be between £35bn and £39bn.

But the Irish government said that as far as it was concerned the agreement signed on Friday between the EU and the UK was binding.

"The European Union will be holding the United Kingdom to account," the Irish government's chief whip told RTE.

"My question to anybody within the British government would be, why would there be an agreement, a set of principled agreements, in order to get to phase two, if they weren't going to be held up? That just sounds bizarre to me," Joe McHugh told RTE Radio's This Week.

'Regulatory alignment'

Mr Davis stressed in his Marr interview that the UK was committed to keeping a "frictionless and invisible" Irish border and it would "find a way" to do this if there was a "no deal" Brexit. [...]

Mr Davis stressed Friday's agreement was conditional on getting a trade deal, agreements on security and foreign affairs, as well as the two-year transition period the UK wants after if officially leaves the EU in March 2019.

Friday's agreement includes a fallback position if the UK fails to get a trade deal, which proposes full regulatory "alignment" between the EU and the UK.

This clause had been diluted at the insistence of the Democratic Unionist Party, which fears Northern Ireland would be separated from the rest of the UK, and move closer to Ireland, if it had to adopt EU rules to keep goods flowing across the border.

'Major partner'

But there is still controversy, and confusion, over what "full alignment" would mean in practice, with some Brexiteers fearing the UK would have to continue to abide by EU regulations on agriculture and other issues after Brexit and would not be able to strike its own trade deals.

Mr Davis has said "full alignment" would apply to the whole of the UK, not just Northern Ireland, but the Sunday Telegraph said Conservative Brexiteers had been reassured that it was "non-binding" and had been included to secure Ireland's backing for the deal.

Pushed to explain what it meant, Mr Davis told Andrew Marr: "We want to protect the peace process and we also want to protect Ireland from the impact of Brexit for them. This was a statement of intent more than anything else." [...]

Full article on BBC

© BBC - British Broadcasting Corporation

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