Theresa May: UK to leave European single market
UK Prime Minster Theresa May set out her government’s Brexit strategy, which will mean leaving both the European customs union and the single market. Speaking at the Mansion House today (17 January), May said the Brexit deal “will be put to a vote in both houses of Parliament” and added her government will push for the “freest possible trade” with European countries and aim to sign new deals with others around the world.
May also had this message for the remaining 27 EU member states: “We will continue to be reliable partners, willing allies and close friends. We want to buy your goods, sell you ours, trade with you as freely as possible, and work with one another to make sure we are all safer, more secure and more prosperous through continued friendship.”
The Prime Minister’s speech was generally well received by business figures today – but with some words of caution.
The parcel broker Fastlane International welcomed May’s plans for a ‘bold and ambitious’ Free Trade Agreement with the EU; but it also argued that her “declared aim of abandoning the EU Common External will cost UK exporters £44bn and lead to excessive delays and red tape for shipments at EU borders”.
Fastlane’s Head of Consumer Research, David Jinks, explained: ‘Teresa May has called in her landmark speech for tariff-free trade with Europe, and for cross-border trade to be as frictionless as possible. This is a welcome and reassuring move. We very much hope Tariff-free trade, together with a customs agreement, will prove to be her line in the sand.
“However, Fastlane is concerned that Mrs May stated she does not want the UK to be bound by the Common External Tariff. In her speech, May said: ‘I do not want Britain to be part of the Common Commercial Policy and I do not want us to be bound by the Common External Tariff. These are the elements of the Customs Union that prevent us from striking our own comprehensive trade agreements with other countries.’
“Moving outside the EU’s Common External Tariff would mean the need to set our own tariff rates. That entails setting our own duties on 19,000 individual tariff codes across a huge variety of items – a move undoubtedly leading to increased border delays and red tape for British importers and exporters, and EU businesses looking to trade with the UK. It’s a frightening scenario that could result in an increase in the cost of imports of around 20%; £44bn on current UK business exports to the EU of around £220bn.”
Jinks concluded: “Fastlane supports a lot of the ambitions in Mrs May’s Brexit speech as being very positive for UK importers and exporters; there is undoubtedly much that can be improved in our trade with the EU and beyond. But abandoning the EU Common External Tariff is throwing the baby away with the bath water.”
