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| Theresa May Set to Outline U.K. Withdrawal From European Market | Theresa May Set to Outline U.K. Withdrawal From European Market |
| (about 2 hours later) | |
| LONDON — In a speech that holds the potential to define Britain’s relations with its neighbors for decades to come, Prime Minister Theresa May was expected on Tuesday to chart a course toward a clean break with the European Union after more than four decades of integration with the Continent. | LONDON — In a speech that holds the potential to define Britain’s relations with its neighbors for decades to come, Prime Minister Theresa May was expected on Tuesday to chart a course toward a clean break with the European Union after more than four decades of integration with the Continent. |
| Mrs. May is expected to stress Britain’s determination to regain control of migration from the European Union and to reject the supremacy of the European Court of Justice, even at the risk of losing access to the single market and its nearly 500 million consumers. | |
| The long-awaited speech will mark a shift for Mrs. May, who has dropped heavy hints about her thinking but refused to outline publicly how Britain will leave the bloc after voters supported a withdrawal in a June referendum. | The long-awaited speech will mark a shift for Mrs. May, who has dropped heavy hints about her thinking but refused to outline publicly how Britain will leave the bloc after voters supported a withdrawal in a June referendum. |
| The speech was expected to strike a diplomatic note, including an appeal for a new partnership with Continental Europe, but Mrs. May is likely to make clear that controlling its borders is Britain’s priority, even if that means losing the trading advantages that membership grants. | The speech was expected to strike a diplomatic note, including an appeal for a new partnership with Continental Europe, but Mrs. May is likely to make clear that controlling its borders is Britain’s priority, even if that means losing the trading advantages that membership grants. |
| “We seek a new and equal partnership — between an independent, self-governing, Global Britain and our friends and allies in the E.U.,” Mrs. May is scheduled to say, according to excerpts from her speech released by her office. | “We seek a new and equal partnership — between an independent, self-governing, Global Britain and our friends and allies in the E.U.,” Mrs. May is scheduled to say, according to excerpts from her speech released by her office. |
| “Not partial membership of the European Union, associate membership of the European Union, or anything that leaves us half-in, half-out. We do not seek to adopt a model already enjoyed by other countries. We do not seek to hold on to bits of membership as we leave,” she is expected to add. | “Not partial membership of the European Union, associate membership of the European Union, or anything that leaves us half-in, half-out. We do not seek to adopt a model already enjoyed by other countries. We do not seek to hold on to bits of membership as we leave,” she is expected to add. |
| As such, her intervention represents an opening gambit in a hugely complex negotiation, and will most likely define the broad objectives, but not the details, of British withdrawal. “The United Kingdom is leaving the European Union. My job is to get the right deal for Britain as we do,” Mrs. May was expected to say. | As such, her intervention represents an opening gambit in a hugely complex negotiation, and will most likely define the broad objectives, but not the details, of British withdrawal. “The United Kingdom is leaving the European Union. My job is to get the right deal for Britain as we do,” Mrs. May was expected to say. |
| Mrs. May’s speech, scheduled to be delivered in the grand surroundings of Lancaster House in London, will be the most closely watched statement on European policy since January 2013, when the prime minister at the time, David Cameron, promised to hold a referendum on European Union membership. | Mrs. May’s speech, scheduled to be delivered in the grand surroundings of Lancaster House in London, will be the most closely watched statement on European policy since January 2013, when the prime minister at the time, David Cameron, promised to hold a referendum on European Union membership. |
| Currency markets have been jittery in recent days, pushing the pound lower amid fears that Mrs. May will convey the message that politics may prove a bigger consideration than economics in the withdrawal talks. | Currency markets have been jittery in recent days, pushing the pound lower amid fears that Mrs. May will convey the message that politics may prove a bigger consideration than economics in the withdrawal talks. |
| Mrs. May, who came to power after the referendum, has promised to initiate a two-year negotiation on a British withdrawal — commonly known as Brexit — by the end of March, putting the country on course to leave the European Union in early 2019. | Mrs. May, who came to power after the referendum, has promised to initiate a two-year negotiation on a British withdrawal — commonly known as Brexit — by the end of March, putting the country on course to leave the European Union in early 2019. |
| The prospect that Britain would remain part of the single market has been fading since Mrs. May demanded complete control of migration from the European Union and release from the European Court of Justice while speaking at the Conservative Party convention in October. | |
| That stance is generally regarded as incompatible with membership in the European Union’s single market, which has made the free movement of people — as well as goods, capital and services — one of its bedrock principles, and which relies on the court to arbitrate. | That stance is generally regarded as incompatible with membership in the European Union’s single market, which has made the free movement of people — as well as goods, capital and services — one of its bedrock principles, and which relies on the court to arbitrate. |
| Mrs. May also seems prepared to abandon membership in the customs union, which eliminates tariffs between European Union countries and some other near neighbors that participate. | Mrs. May also seems prepared to abandon membership in the customs union, which eliminates tariffs between European Union countries and some other near neighbors that participate. |
| Yet membership in the customs union limits the ability of member countries to strike individual free-trade deals with non-European nations. | Yet membership in the customs union limits the ability of member countries to strike individual free-trade deals with non-European nations. |
| Brexit supporters have argued that leaving the bloc will provide new trading opportunities. Mrs. May is expected to echo that idea in her Tuesday speech and to call for a “country that gets out into the world to build relationships with old friends and new allies alike.” | Brexit supporters have argued that leaving the bloc will provide new trading opportunities. Mrs. May is expected to echo that idea in her Tuesday speech and to call for a “country that gets out into the world to build relationships with old friends and new allies alike.” |
| Ideally, Britain would like to have its cake and eat it, in the memorable phrase of the foreign secretary, Boris Johnson. In other words, Britain would reject what it dislikes about the bloc, such as freedom of movement, but keep trade unencumbered as it tries to get the best possible trading deal consistent with its other objectives. | Ideally, Britain would like to have its cake and eat it, in the memorable phrase of the foreign secretary, Boris Johnson. In other words, Britain would reject what it dislikes about the bloc, such as freedom of movement, but keep trade unencumbered as it tries to get the best possible trading deal consistent with its other objectives. |
| But that is unlikely to be acceptable to the remaining European Union nations. One possible outcome is that Britain will leave the single market, and probably the customs union, too, but will then try to maintain some of its privileges through a deep trade and cooperation agreement with the European Union. | But that is unlikely to be acceptable to the remaining European Union nations. One possible outcome is that Britain will leave the single market, and probably the customs union, too, but will then try to maintain some of its privileges through a deep trade and cooperation agreement with the European Union. |
| Its ability to accomplish that would still depend on the willingness of the 27 other European Union nations, as well as the European Parliament, which would have to agree any new trade deal. | Its ability to accomplish that would still depend on the willingness of the 27 other European Union nations, as well as the European Parliament, which would have to agree any new trade deal. |
| “Unless May does a complete U-turn from here, any hope of full single market access for post-E.U. Britain is more or less out of the question,” Kallum Pickering, senior U.K. economist at Berenberg Bank in London, wrote in an analysis. | “Unless May does a complete U-turn from here, any hope of full single market access for post-E.U. Britain is more or less out of the question,” Kallum Pickering, senior U.K. economist at Berenberg Bank in London, wrote in an analysis. |
| Although Mr. Pickering wrote that “an exit from the E.U. customs union is likely, too,” he expected Britain and the European Union to agree to a deal in which “the U.K. maintains a good level of access to the E.U.’s goods markets and limited access to the less developed services markets.” | Although Mr. Pickering wrote that “an exit from the E.U. customs union is likely, too,” he expected Britain and the European Union to agree to a deal in which “the U.K. maintains a good level of access to the E.U.’s goods markets and limited access to the less developed services markets.” |
| “Crucially, we expect the U.K. to lose its E.U. financial services passport,” Mr. Pickering wrote, referring to a system that allows banks based in Britain to offer financial services throughout the European Union. “This follows from the U.K. raising some modest barriers to migration from the E.U.” | “Crucially, we expect the U.K. to lose its E.U. financial services passport,” Mr. Pickering wrote, referring to a system that allows banks based in Britain to offer financial services throughout the European Union. “This follows from the U.K. raising some modest barriers to migration from the E.U.” |
| Another crucial issue is whether Britain will negotiate a transitional agreement to avoid a sudden change in the rules for business — the so-called cliff edge — in 2019, with the possible introduction of tariffs under rules laid down by the World Trade Organization. | Another crucial issue is whether Britain will negotiate a transitional agreement to avoid a sudden change in the rules for business — the so-called cliff edge — in 2019, with the possible introduction of tariffs under rules laid down by the World Trade Organization. |
| There is some menace underlining the evolving British negotiating position. In an interview published on Sunday in the German newspaper Die Welt, Philip Hammond, the chancellor of the Exchequer, warned that Britain might cut corporate taxes in order to lure businesses, undercutting neighbor nations, if it were locked out of the European market. | There is some menace underlining the evolving British negotiating position. In an interview published on Sunday in the German newspaper Die Welt, Philip Hammond, the chancellor of the Exchequer, warned that Britain might cut corporate taxes in order to lure businesses, undercutting neighbor nations, if it were locked out of the European market. |
| Many European Union countries have backed taking a hard line against Britain to send a message to any other member states that might consider leaving. | Many European Union countries have backed taking a hard line against Britain to send a message to any other member states that might consider leaving. |
| Supporters of a withdrawal have been encouraged, however, by reports that other countries in the bloc have recognized that they might suffer if there were a complete rupture and they were denied access to London’s large financial services sector. | Supporters of a withdrawal have been encouraged, however, by reports that other countries in the bloc have recognized that they might suffer if there were a complete rupture and they were denied access to London’s large financial services sector. |
| But business remains nervous. | But business remains nervous. |
| “The practicalities of a disorderly crash-landing need to be understood,” Carolyn Fairbairn, director general of the Confederation of British Industry, a business lobby group, said in an interview with The Guardian. “We have had conversations with some of the proponents of just walking away and we will again talk to them about what we see from our members about the consequences of that.” | “The practicalities of a disorderly crash-landing need to be understood,” Carolyn Fairbairn, director general of the Confederation of British Industry, a business lobby group, said in an interview with The Guardian. “We have had conversations with some of the proponents of just walking away and we will again talk to them about what we see from our members about the consequences of that.” |