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EU wins first round of Brexit battle by 'forcing UK out of single market', former adviser warns Theresa May | EU wins first round of Brexit battle by 'forcing UK out of single market', former adviser warns Theresa May |
(about 3 hours later) | |
The EU has already won the first round of the Brexit battle by forcing Britain out of the single market, Theresa May has been warned. | The EU has already won the first round of the Brexit battle by forcing Britain out of the single market, Theresa May has been warned. |
Sir Andrew Cahn, a former UK single market adviser, also poured cold water on hopes of a smooth exit, predicting a “bitter divorce” at potential huge economic cost. | Sir Andrew Cahn, a former UK single market adviser, also poured cold water on hopes of a smooth exit, predicting a “bitter divorce” at potential huge economic cost. |
The Prime Minister was adopting a “have cake and eat it” strategy – although, unlike Foreign Secretary Boris Johnson, she was too tactful to put it like that. | |
Sir Andrew pointed out that the Treasury had forecast a 7.5 per cent slump in GDP if Britain crashes out of the EU with no fresh trade deal – falling back on World Trade Organisation tariffs. | Sir Andrew pointed out that the Treasury had forecast a 7.5 per cent slump in GDP if Britain crashes out of the EU with no fresh trade deal – falling back on World Trade Organisation tariffs. |
On Ms May’s threat to walk away with “no deal” if the EU refuses her demands, he said: “It is quite a risk to take.” | On Ms May’s threat to walk away with “no deal” if the EU refuses her demands, he said: “It is quite a risk to take.” |
Britain had “some levers” to pull, because it is a large market for EU countries, but he said: “She is playing a weak negotiating hand as well as she can.” | Britain had “some levers” to pull, because it is a large market for EU countries, but he said: “She is playing a weak negotiating hand as well as she can.” |
And he added: “The EU side, after all, in a way, have already won the first round of this negotiation because they have forced the UK to say ‘no, we won’t be in the single market’. | |
“Ideally, we would have stayed in on our own terms. | “Ideally, we would have stayed in on our own terms. |
“Their next line will be to say ‘you sign the exit cheque first and then we will start negotiating’ – that’s a real challenge.” | |
Michel Barnier, the European Commission chief negotiator, has said the UK must agree the fee for outstanding liabilities of up to £50bn. | |
Sir Andrew, the former chief executive of UK Trade & Investment (UKTI), agreed it was in the EU’s own interests to reach a new trading agreement, but warned that would take years. | |
And he said: “It’s a bit like a divorce – it’s a bitter divorce and both sides know that the win-win would be to have an agreement. | |
“But the reality is, the bitterness is such – the political red lines are such – that, when we go to court, it could end up being lose-lose.” | |
The warning was in stark contrast to Ms May’s bullish prediction that a trade agreement can be easily reached, because it is in both sides’ interests. | The warning was in stark contrast to Ms May’s bullish prediction that a trade agreement can be easily reached, because it is in both sides’ interests. |
In her speech, she said: “I know there are some voices calling for a punitive deal that punishes Britain and discourages other countries from taking the same path. | In her speech, she said: “I know there are some voices calling for a punitive deal that punishes Britain and discourages other countries from taking the same path. |
“That would be an act of calamitous self-harm for the countries of Europe. And it would not be the act of a friend.” | “That would be an act of calamitous self-harm for the countries of Europe. And it would not be the act of a friend.” |
The Prime Minister insisted “this scenario need never arise”, saying: “I am sure a positive agreement can be reached.” | The Prime Minister insisted “this scenario need never arise”, saying: “I am sure a positive agreement can be reached.” |
Sir Andrew, who advised on setting up the single market in the 1980s, also warned of the difficulties of negotiating a trade deal with Donald Trump. | Sir Andrew, who advised on setting up the single market in the 1980s, also warned of the difficulties of negotiating a trade deal with Donald Trump. |
“The implacable truth of trade deal negotiations is that if you want something, you have to pay for it | |
“The smaller negotiating partner pays more and gives more than the larger negotiating partner – and it takes a long time, five to 10 years.” |