{"id":62395,"date":"2018-02-06T21:30:23","date_gmt":"2018-02-06T21:30:23","guid":{"rendered":"http:\/\/www.bnreport.com\/eu-trade-partners-demand-concessions-for-brexit-transition-rollover-4\/"},"modified":"2018-02-06T21:30:23","modified_gmt":"2018-02-06T21:30:23","slug":"eu-trade-partners-demand-concessions-for-brexit-transition-rollover-4","status":"publish","type":"post","link":"https:\/\/www.bnreport.com\/en\/eu-trade-partners-demand-concessions-for-brexit-transition-rollover-4\/","title":{"rendered":"EU trade partners demand concessions for Brexit transition rollover"},"content":{"rendered":"

Key global trade partners want concessions from Britain if the U.K. is to retain the same benefits it currently enjoys under EU trade deals during a post-Brexit transition period.<\/p>\n

U.K. Brexit Secretary David Davis asserted last week that maintaining the status quo \u201cis also in the interests of countries who have signed those trade deals with the European Union.\u201d But it appears some trading partners around the world demand a price for Davis\u2019 proposal.<\/p>\n

At a briefing for EU27 diplomats Wednesday, European Commission deputy Brexit negotiator Sabine Weyand said that London will need permission from all of Europe\u2019s more than 40 trade partners to stay in agreements during the post-Brexit transitional period. She revealed that two countries \u2014 South Korea and Chile \u2014 had already raised objections, three diplomats said on condition of anonymity.<\/p>\n

A South Korean official told POLITICO that it was \u201cdifficult\u201d to accept Davis\u2019 proposal before having held more detailed discussions with London, but declined to provide more detailed comments. A Chilean official said that Santiago was \u201cin principle in favor of preserving the commercial flows\u201d with Britain during transition but demanded concessions in the agricultural sector, which would apply to a future U.K. accord with the South American country.<\/p>\n

\n

\u201cThe U.K. is simply not powerful enough to make such demands on its own\u201d \u2014 Samuel Lowe, trade researcher at the Center for European Reform<\/em><\/p>\n<\/blockquote>\n

Britain and the EU aim to agree a standstill transition deal by the end of March, under which the U.K. will remain bound by the bloc\u2019s rules for around two years, although it will have legally departed the bloc. During this period it will have to abide by all the EU\u2019s international agreements, including free-trade agreements, but there is no guarantee that third-country trading partners will do the same.<\/p>\n

As EU chief negotiator Michel Barnier put it at a press conference Monday<\/a>: \u201cOur partners around the world may have their own views on this.\u201d<\/p>\n

For the U.K., the situation could be particularly unfortunate because the risk of emerging trade barriers is one-sided. EU directives adopted<\/a> this week \u2014 that will be converted into Barnier\u2019s instructions for negotiating a transition period \u2014 envisage that Britain will stay in the EU\u2019s single market and customs union during the transitional period. That means London will have to grant lower tariffs to all EU trade partners \u2014 without the guarantee of receiving the favor in return.<\/p>\n

\u201cWe risk a worst-case scenario where U.K. exporters lose their preferential access to third countries while companies from those states can still export to the U.K. under preferential conditions,\u201d said Guillaume Van der Loo, a trade researcher at the CEPS think tank, who has given evidence to MPs on the British parliament\u2019s trade committee.<\/p>\n

Two EU diplomats said that it was \u201cperfectly plausible\u201d that more countries would raise objections to Davis\u2019 plan of keeping EU trade deals. \u201cThey will keep their free trade in anyway, it\u2019s really the British who stand to lose out here,\u201d one said.<\/p>\n

\u2018Good leverage\u2019<\/h3>\n

South Korea has already indicated that it wants to address its trade deficit with the U.K., which was particularly high between 2012 and 2015, before granting Britain continued market access during transition, EU diplomats and business people said.<\/p>\n

\u201cExports are South Korea\u2019s credo No. 1, and trade balance is their credo No. 2,\u201d said Christoph Heider, president of the European Chamber of Commerce in Korea, who is in close contact with the government in Seoul. \u201cI expect that Great Britain will have to make concessions if it wants to stay in the trade deal during the transition.\u201d<\/p>\n

Trade threats during the transition period might provide extra leverage to third countries on future deals, potentially forcing longer-term concessions on the U.K. in return for maintaining trade in the short term.<\/p>\n

\u201cSouth Korea will use each and every possibility to renegotiate,\u201d said one EU diplomat involved in the discussions. The trade ministry in Seoul did not respond to a request for comment.<\/p>\n

Chile has also indicated it wants to use its leverage over the U.K. to push for more favorable conditions in a future trade deal: \u201cChile has a very big export interest in the agriculture sector,\u201d said the official from the Andean country, adding that the EU-Chile trade deal includes safeguards such as tariff-rate quotas that Europe had enforced to protect sensitive agriculture sectors.<\/p>\n

\u201cThose sensitivities were raised by Southern European countries,\u201d the official argued, saying that there was a clear \u201cexpectation\u201d that Britain would allow higher exports of fruit, meat and biofuels from South America once it concludes its individual deal with Chile.<\/p>\n

On the plus side, for London, it has received encouraging signals from Japan and Canada: \u201cOur main interest is to keep the status quo,<\/em>\u201d said a Japanese official, stressing that any renegotiation of British terms of market access would be too time intensive.<\/p>\n

A spokesperson for the Canadian government referred to the recently concluded EU-Canada trade deal and said that Ottawa wanted to \u201cpreserve\u201d a \u201cstable and predictable trading relationship\u201d with the U.K.<\/p>\n

Samuel Lowe, a trade researcher at the Center for European Reform, said that Britain would need to ask for the EU\u2019s help to get all trade partners on board for the transitional plan.<\/p>\n

\u201cThe U.K. is simply not powerful enough to make such demands on its own,\u201d he said. If Brussels was going to assist London in convincing trade partners, this would come at a cost, he said: \u201cThis gives the EU some good leverage.\u201d<\/p>\n

A spokesperson for the U.K.\u2019s Department for Exiting the EU declined to comment directly but said that Davis\u2019 remarks in a speech on transition negotiations last Friday<\/a> \u201cspeak for themselves.\u201d<\/p>\n

In that speech he said: \u201cSince the terms of trade between the U.K. and EU will not have changed, a simple step forward is for all parties \u2026 to agree that the United Kingdom will continue to be party to these agreements while we continue to work on ensuring they maintain their effects in perpetuity.\u201d<\/p>\n

Original Article<\/a><\/p>\n

[contf] [contfnew] <\/p>\n

<\/a><\/h5>\n","protected":false},"excerpt":{"rendered":"

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