UK Transport and Brexit News & Views No. 50

Mark’s Brexit Week for Transport

In the past week, the UK has been focusing on bilateral issues relating to Brexit, namely those concerning Calais with France. However, there is concern here in Brussels that this amounts to putting the cart before the horse.

Finally, we will be hosting a roundtable event with Henrik Hololei, the Director-General of the European Commission’s DG MOVE in the European Parliament on February 27th.  We will be focusing on the future of European transport, as we fully expect future EU transport regulations to apply to us, or at least influence our own regulations, whatever the final deal on Brexit looks like. If you would like to attend then please join us. If you would like to attend then please join us.
 
1. EU toughens conditions for Post-Brexit transition
The Financial Times reports that the EU has toughened its conditions for a Post-Brexit transition deal, according to revised directives drawn up by the EU27 for Michel Barnier. These tougher conditions include extending free movement rights and a special status to all EU citizens arriving before the final day of the transition at the end of 2020. They also include requirements that British ministers seek “authorisation” from Brussels in order to continue benefiting from EU trade deals that it would otherwise fall out of on Brexit day. The transition deal has taken front stage on the Brexit front as businesses grow increasingly anxious waiting for assurances that they will be able to operate under current European law. Although there is general acceptance that this transition deal will essentially be a ‘status-quo’ one, the tightened mandate for Barnier which seeks to clarify what the EU wants in the more politically sensitive areas will certainly raise the stakes in the negotiation over the coming weeks. Do you know what a transition deal means for your business? Contact us to find out more.

2. Norwegian officials tell Brussels they may seek radical rethink of their terms if UK has access to single market for key sectors
The Guardian reports that as the EU toughens up its terms for a transition deal that Norway could now become a problem for the UK as it has warned Brussels that any ‘special’ trade deal with the UK could cause Norway to rethink its agreements with the EU. There have been repeated interventions by Oslo to the EU strongly suggesting that an overly generous offer to the UK will lead Norway to renegotiate its ties with the bloc. Norway’s stance on this issue falls in line with the EU’s position that the Norwegian ‘off the shelf’ model is the most favourable option if the UK wants to remain as close as possible to the bloc. Although the mood music in Oslo is not currently in favour of renegotiation of the country’s ties to the bloc, namely through its EEA membership, there could be a turn in that direction should the UK be given more favourable terms than Norway currently enjoys.

3. UK airlines risk losing flying rights in the EU after Brexit
A meeting of the European Commission and diplomats from the remaining 27 EU countries has taken the first steps in sketching out the EU’s negotiating position on post-Brexit aviation links with Britain. In a presentation given by the European Commission, it was stated that Britain’s withdrawal from the bloc means that there would technically be no agreement to enable planes to fly between the U.K. and the EU. Unlike when it comes to the trade in goods, there is no fall-back option of World Trade Organization rules when it comes to aviation. There are currently nine air freedoms that are awarded to airlines such as those from the UK. The most generous of these freedoms allows the right to fly solely within a foreign country. It’s this freedom that allows, for example, EasyJet to operate between the French cities of Nice and Paris. Given the UK’s red line of not accepting ECJ jurisdiction, this leaves a future aviation relationship resembling that the EU has with the US and Canada. This type of relationship would only give UK airlines the third and fourth and potentially fifth “freedoms,” which would permit flights between the U.K. and EU countries, but not the right to offer domestic flights within an EU nation or to fly between two EU states. Are you concerned about the UK’s impending ‘third country’ status and what this means for your business? Then contact us to find out more about what you can do about it.

4. ICYMI- Informal Network on Brexit Press Release
On December 20th, UKTiE was part of a joint call of businesses who are members of an Informal Brussels Network on Brexit. In the call, we welcomed both the decision by the European Council to move to the second phase of the negotiations and the European Commission’s supplementary negotiating directives. We also announced that the network strongly supports all who are working to achieve a smooth post-Brexit transition and a successful future relationship, and that we are ready to offer input to the UK and EU negotiating teams over the coming months. Our door is open.

5. UKTiE Supported by IDA Group
UKTiE’s work is supported by IDA Group. IDA Group is a highly specialized consultancy for governmental affairs, reputation management, trade and funding. They share the belief in effective dialogue built upon trust and mutual understanding. Their diverse team of experts includes seasoned diplomats, politicians, journalists, lawyers and designers, supported by a global network of trusted partners, can help create measurable impact for your business. You will find more information on IDA Group and what services they can provide you with here.

6. The view from Paris: Post-Brexit financial access will come at a cost
French president Emmanuel Macron has rejected the idea of a tailored Brexit deal for the City, insisting Britain will not be allowed full access to European Union markets, including financial services, unless it pays into the EU budget and accepts all its rules.  City firms are increasingly concerned about new trade barriers, including the loss of so-called “passporting” rights, that allow them to operate throughout the EU from headquarters in London. Macron’s message to Theresa May was that if the UK wants access to financial services that UK is more than welcome to have it but that a ‘differentiated access’ was not possible as it would need to contribute to the budget, and accept European jurisdiction. These terms are the same that are applied to Norway with the only alternative, from an EU perspective, being a Canada-style deal which excludes financial services.

7. UKTiE has also put together the latest timetable for Brexit. We will keep this up to date as the process develops: