1 February 2018

  |  CBI Updates Team

Update

CBI calls for greater clarity and urgency on Brexit trade and on transition

The CBI has set out a new vision for the future UK-EU economic relationship, and on Monday, the efforts to secure transitional arrangements took another step forwards.

CBI calls for greater clarity and urgency on Brexit trade and on transition

Monday saw agreement reached by EU27 Ministers on the directives that will give European Chief Negotiator, Michel Barnier the mandate to formally negotiate a time-limited, status-quo transition period with the UK. However, despite this welcome news there remains concerns about the prospect of the UK becoming a rule-taker in this period, with the CBI’s Head of EU Negotiations, Nicole Sykes, reflecting the importance of the UK maintaining a voice at the table where possible during the transition period.

Under the EU’s guidelines, the UK will be able to continue trading with the EU as it does today, until the start of 2021, members can read more here. But the years beyond 2021 matter the most. To support the government in taking these momentous decisions on the long-term future relationship, last week Carolyn set out the business vision for a good Brexit deal; a plan where evidence trumps ideology. 

The CBI drew on extensive member outreach over the past 18 months to reach two main conclusions. First, neither the Canada nor the Norway models for a future relationship between the UK and the EU are ambitious enough. The second conclusion is on the possibility of a future customs union between the UK and the EU. Carolyn outlined the importance of decisions being taken on the basis of evidence with the answers being found through a hard-headed spreadsheet assessment of pros and cons.

On this balance of advantage, the majority of businesses believe that, unless and until an alternative solution is found, the benefits of a comprehensive customs union outweigh the benefits of FTAs outside the EU. The EU is by far the UK’s largest trading partner, accounting for 43% of exports and 53% of imports. Carolyn reiterated that any new customs arrangement would be subject to negotiating a good deal but the EU market remains a priority for the majority of businesses as a practical, real world answer that could help resolve some of the complex issues raised by Brexit.  

For more information, insight and intelligence on the latest Brexit developments and its implications, visit the CBI’s Brexit hub, or contact EUNegotiations@cbi.org.uk.