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Brexit: pressure on PM to clarify vision as new cabinet split emerges Brexit: pressure on PM to clarify vision as new cabinet split emerges
(35 minutes later)
Calls for Theresa May to define position on EU customs union after ministers’ divisive remarksCalls for Theresa May to define position on EU customs union after ministers’ divisive remarks
Jessica Elgot in Shanghai and Jessica Elgot in Shanghai and
Rowena MasonRowena Mason
Fri 2 Feb 2018 11.09 GMTFri 2 Feb 2018 11.09 GMT
First published on Fri 2 Feb 2018 06.38 GMTFirst published on Fri 2 Feb 2018 06.38 GMT
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Theresa May is under pressure to spell out her vision for the UK’s future trading relations after a new cabinet split emerged on whether the country should remain part of a customs union with the EU.Theresa May is under pressure to spell out her vision for the UK’s future trading relations after a new cabinet split emerged on whether the country should remain part of a customs union with the EU.
The prime minister did not rule out such an arrangement, which would limit the UK’s ability to strike free trade agreements with non-EU countries, but failed to set out what she thinks should happen. The prime minister did not rule out such an arrangement, which would limit Britain’s ability to reach free trade agreements with non-EU countries, but failed to say what she thought should happen.
She is facing calls to clarify the government’s position after the Financial Times reported on Friday that the chancellor, Philip Hammond, and the business secretary, Greg Clark, favoured the idea of staying in a customs union for goods. She is facing calls to clarify the government’s position after the Financial Times reported on Friday that the chancellor, Philip Hammond, and the business secretary, Greg Clark, favoured staying in a customs union for goods.
The trade secretary, Liam Fox, was quick to slap down the idea, saying the government was not considering such an arrangement with the EU. He insisted it would restrict the UK in forging new trade deals with the rest of the world. The international trade secretary, Liam Fox, was quick to slap down the idea, saying the government was not considering such an arrangement with the EU. He insisted it would restrict the UK in forging new trade deals with the rest of the world.
His comments poured cold water on reports that the government was considering a deal under which trade in goods would be covered by a customs union arrangement while the UK would retain independent policy on services. His comments poured cold water on reports that the government was considering a deal under which trade in goods would be covered by a customs union arrangement, while the UK would retain independent policy on services.
Speaking to Bloomberg TV in China on the final day of the prime minister’s three-day visit, Fox said being part of a customs union would not allow Britain to set its own trade regulation. Speaking to Bloomberg TV in China on the final day of the prime minister’s three-day visit, Fox said being part of a customs union would prevent Britain from setting trade regulation.
“It is very difficult to see how being in a customs union is compatible with having an independent trade policy, because we would therefore be dependent on what the EU negotiated in terms of its trading policies and we’d be following behind that,” he said. “It is very difficult to see how being in a customs union is compatible with having an independent trade policy, because we would therefore be dependent on what the EU negotiated in terms of its trading policies, and we’d be following behind that,” he said.
The UK could sign up to all the EU’s rules and regulations, staying in the single market – which provides, free movement of goods, services and people – and the customs union, in which EU members agree tariffs on external states. Freedom of movement would continue and the UK would keep paying into the Brussels pot. We would continue to have unfettered access to EU trade, but the pledge to “take back control” of laws, borders and money would not have been fulfilled. This is an unlikely outcome and one that may be possible only by reversing the Brexit decision, after a second referendum or election.The UK could sign up to all the EU’s rules and regulations, staying in the single market – which provides, free movement of goods, services and people – and the customs union, in which EU members agree tariffs on external states. Freedom of movement would continue and the UK would keep paying into the Brussels pot. We would continue to have unfettered access to EU trade, but the pledge to “take back control” of laws, borders and money would not have been fulfilled. This is an unlikely outcome and one that may be possible only by reversing the Brexit decision, after a second referendum or election.
Britain could follow Norway, which is in the single market, is subject to freedom of movement rules and pays a fee to Brussels – but  is outside the customs union. That combination would tie Britain to EU regulations but allow it to sign trade deals of its own. A “Norway-minus” deal is more likely. That would see the UK leave the single market and customs union and end free movement of people. But Britain would align its rules and regulations with Brussels, hoping this would allow a greater degree of market access. The UK would still be subject to EU rules.Britain could follow Norway, which is in the single market, is subject to freedom of movement rules and pays a fee to Brussels – but  is outside the customs union. That combination would tie Britain to EU regulations but allow it to sign trade deals of its own. A “Norway-minus” deal is more likely. That would see the UK leave the single market and customs union and end free movement of people. But Britain would align its rules and regulations with Brussels, hoping this would allow a greater degree of market access. The UK would still be subject to EU rules.
A comprehensive trade deal like the one handed to Canada would help British traders, as it would lower or eliminate tariffs. But there would be little on offer for the UK services industry. It is a bad outcome for financial services. Such a deal would leave Britain free to diverge from EU rules and regulations but that in turn would lead to border checks and the rise of other “non-tariff barriers” to trade. It would leave Britain free to forge new trade deals with other nations. Many in Brussels see this as a likely outcome, based on Theresa May’s direction so far.A comprehensive trade deal like the one handed to Canada would help British traders, as it would lower or eliminate tariffs. But there would be little on offer for the UK services industry. It is a bad outcome for financial services. Such a deal would leave Britain free to diverge from EU rules and regulations but that in turn would lead to border checks and the rise of other “non-tariff barriers” to trade. It would leave Britain free to forge new trade deals with other nations. Many in Brussels see this as a likely outcome, based on Theresa May’s direction so far.
Britain leaves with no trade deal, meaning that all trade is governed by World Trade Organisation rules. Tariffs would be high, queues at the border long and the Irish border issue severe. In the short term, British aircraft might be unable to fly to some European destinations. The UK would quickly need to establish  bilateral agreements to deal with the consquences, but the country would be free to take whatever future direction it wishes. It may need to deregulate to attract international business – a very different future and a lot of disruption.Britain leaves with no trade deal, meaning that all trade is governed by World Trade Organisation rules. Tariffs would be high, queues at the border long and the Irish border issue severe. In the short term, British aircraft might be unable to fly to some European destinations. The UK would quickly need to establish  bilateral agreements to deal with the consquences, but the country would be free to take whatever future direction it wishes. It may need to deregulate to attract international business – a very different future and a lot of disruption.
Asked if he was ruling out any form of customs union in future, Fox said: “We have to be outside of that to take advantage of those growing markets. One of the reasons we are leaving the European Union is to take control and that’s not possible with a common external tariff.”Asked if he was ruling out any form of customs union in future, Fox said: “We have to be outside of that to take advantage of those growing markets. One of the reasons we are leaving the European Union is to take control and that’s not possible with a common external tariff.”
Speaking on the last day of their trip to China, May was more vague about the government’s intention. May was more vague about the government’s intention.
“What I want to do is ensure that we have got the best possible trade arrangements with China and with other countries around the world once we have left the European Union,” she told Sky News. “I do want to do those free trade agreements. There is more trade that we can do even before we get to those free trade agreements.” “What I want to do is ensure that we have got the best possible trade arrangements with China and with other countries around the world once we have left the European Union,” she told Sky News on Friday.
Fox said the Chinese were impressed with May’s visit and said it should silence her backbench critics. “Theresa May’s middle name is resilience,” he told Bloomberg. “And that’s exactly what she’s showing and I do wish more people could have seen the commitment she was showing to Britain’s national interest on this trip to China.” “I do want to do those free trade agreements. There is more trade that we can do even before we get to those free trade agreements.”
May also avoided questions about her future, focusing instead on her present trip to China. Fox said the Chinese were impressed with May’s visit and it should silence her backbench critics. “Theresa May’s middle name is resilience,” he told Bloomberg.
Asked by Sky News whether she planned to deliver her vision of Brexit to the next election, she said: “That’s what I’m doing here in China. I’m getting on with delivering on exactly what the British people want us to do.” “And that’s exactly what she’s showing and I do wish more people could have seen the commitment she was showing to Britain’s national interest on this trip to China.”
In her interview with the BBC, May repeated her assertion that she was not a quitter, but pointedly used the past and present tense in relation to her role as prime minister, but not the future tense. May also avoided questions about her future. Asked by Sky News whether she planned to deliver her vision of Brexit into the next election, she said: “That’s what I’m doing here in China. I’m getting on with delivering on exactly what the British people want us to do.”
In answer to the question: “Do you want to be the Tory leader at the next general election?” she replied: “I’ve been asked this question on a number of occasions. I’ve said very clearly throughout my political career: I’ve served my country and I’ve served my party. I’m not a quitter. I’m in this because there is a job to be done here, and that’s delivering for the British people and doing that in a way that ensures the future prosperity of our country.” In an interview with the BBC, May repeated her assertion that she was not a quitter, but pointedly used the past and present tense in relation to her role as prime minister, not the future tense.
In answer to the question: “Do you want to be the Tory leader at the next general election?” she replied: “I’ve been asked this question on a number of occasions. I’ve said very clearly throughout my political career: I’ve served my country and I’ve served my party. I’m not a quitter.
“I’m in this because there is a job to be done here, and that’s delivering for the British people and doing that in a way that ensures the future prosperity of our country.”
BrexitBrexit
Liam FoxLiam Fox
European UnionEuropean Union
EuropeEurope
Foreign policyForeign policy
Theresa May
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