11 May 2017

Update

The UK and EU must prioritise trade, jobs and prosperity in a comprehensive new economic partnership

As the EU develops its negotiating principles and the UK political parties lay out their general election positions, it is vital for both the UK and EU to prioritise jobs and trade in Brexit talks.

The UK and EU must prioritise trade, jobs and prosperity in a comprehensive new economic partnership

In recent weeks, the EU has clarified its negotiating position on Brexit in outlining a two-phase approach. The first phase will be to tackle the UK’s withdrawal, while the second will examine a new UK-EU trading relationship. Critically, the first phase doesn’t necessarily have to be complete for the second phase to begin.

The withdrawal agreement in the first phase will cover rights of citizens, the financial settlement, discussions on the border in Ireland and issues surrounding legal certainty of goods and ongoing procedures.

At a press conference on 3 May, the EU Commission’s Chief Negotiator Michel Barnier stressed that the negotiations would be complex and that Brexit would not be painless.

Mr Barnier also acknowledged it would be his role to decide when sufficient progress has been made on the withdrawal agreement, to enable the start of the negotiations on the future relationship. He reiterated European Council President Donald Tusk’s hope that this could be as early as this autumn.

With well over €600 billion worth of trade every year between the UK and EU, the economic case for making rapid progress on a trade agreement is crystal clear. Businesses across Europe will want to see positive momentum quickly once negotiations start after the general election. The CBI believes that discussions around the new trading relationship should begin as soon as possible to deliver certainty and clarity for businesses on both sides.

The CBI’s business manifesto has identified that negotiating a deep and comprehensive, barrier-free UK-EU relationship that works for the whole economy will be one of the next government’s biggest challenges. How the new government approaches the negotiations will be critical for UK business confidence and the country’s position in the world. The CBI is keen to highlight the need for early wins which will send a clear signal that the negotiations have the momentum they need.

In particular, the new government should:

  • Avoid fall-back into World Trade Organisation rules and ensure robust interim transitional arrangements are agreed as soon as possible, and
  • Immediately guarantee right to remain for EU citizens working in the UK, and by December 2017 confirm the new migration system that will enable firms to access the skills and people they need to deliver growth while addressing public concerns.

Business and government will have to work in close partnership to deliver for all sectors, regions and nations as the UK redefines its economic relationship with the EU and with the rest of the world. With this in mind, the CBI is calling for the top minds from government and business to work together in a joint Brexit taskforces on some of the most complex issues such as customs, data, regulation, people, and EU funding. This taskforces should be set up and running by the end of July 2017.

These taskforces will give business the confidence they need to make investment decisions in an uncertain environment and give government evidence-based insight on the implications of the many choices they will make in the next two years.

For any further information about the EU negotiations, please visit the Brexit hub on the CBI website or contact EUNegotiations@cbi.org.uk to talk to one of the team.