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Mark’s Brexit Week for Transport

On Wednesday, the prime minister will send a letter triggering Article 50, thought to be seven or eight pages long, to Donald Tusk, president of the European Council, and give a speech outlining her approach at a trade summit in Birmingham. On Thursday she will publish a white paper detailing how the government’s Great Repeal Bill will take back parliamentary control of all laws. The bill, which will feature in the Queen’s speech in May, will repeal the 1972 European Communities Act and transfer EU law into British legislation. Since the June referendum there has been a lot of energy invested in speculating what Brexit might mean for transport. As we prepare for Article 50 that energy must now be invested in what we would like from the exit negotiations and also the ensuing new trade deal.  

We can shape our own future, but we must shape it now, shape it together by speaking with one voice to the key Brexit decision-makers in Brussels and national capitals, and shape it through evidence and argument, recognising that countless other interests will be seeking  to block, marginalise and frustrate UK transport interests or make the case they are a greater priority. That’s why we are planning to be first out of the Article 50 starting blocks with a round of meetings in April with the key Brexit players here in Brussels, including Guy Verhofstadt’s and Michel Barnier’s teams, as well as the people who influence them. As the Brexit train leaves the station, I invite you to join us and hop on-board! If you want to join UKTiE contact us here  and see our membership brochure here.
1. Barnier warns of dire scenario for UK if talks fail

Last week Michel Barnier addressed officials at the Committee of the Regions on the topic of Brexit. He used this speech to set out some of the EU markers in the upcoming talks in his most concrete terms to date. He began by addressing the fact that a non-agreement scenario is not what Europe wants. He said his top goal is unity, within the EU27 and with the UK. Another priority will be guaranteeing the rights of European citizens. Barnier reaffirmed that the EU will be looking to settle divorce matters before starting on a new trade agreement but he said it shouldn’t be too difficult to achieve as standards and rules are already perfectly integrated. He also echoed Theresa May’s desire to continue a strong relationship on security issues. He set out a bleak vision of the “serious consequences” for transport from leaving without agreement, including ‘the reintroduction of binding customs controls, which will inevitably slow down trade and lead to queues of trucks at Dover and serious disruption to air traffic.’  In today’s Financial Times, he again reiterated how important citizen’s rights are during the negotiations and said that “a united EU is essential for the UK to get to get a deal” and that the EU27 will be stronger when bonds of unity are based on full transparency and public debate. UKTiE is meeting with Barnier’s team in April, contact us here if you would like to be involved. 

 2. House of Lords publish report on the implications of Brexit in air services
Last week, the EU Internal Market Sub-Committee published a report on the implications of Brexit for the UK’s trade in non-financial services with the EU, targeting trade in five service sectors – among which air. The report calls on the Government to negotiate a FTA that secures market access and reciprocal arrangements. In terms of aviation, UK airlines should be able to fly to any point within the EU and provide intra-EU services, either through full voting membership go the ECAA, or by means of a comprehensive UK-EU air services agreement, thus allowing UK airlines to continue to fly the same routes they currently do. The report however warns of the risks of a ‘no deal’ scenario, which would significantly damage the sector.

3. Fears aviation is “being left in the dark” in Brexit talks
It has been repeatedly said that negotiations will first focus on the exit process before discussing the future UK-EU relationship. ACI Europe director general Olivier Jankovec has warned that this sequencing could leave the aviation industry in the dark for months.  As airline route planning requires time and legal certainty, any delay could have serious impacts on the interconnectivity of airports. Charlie Cornish, chief executive of MAG agreed and said: “It has to be a common goal for both sides to agree during 2017 either a temporary or permanent solution for how aviation will operate after April 2019.” Make sure your company stays ahead and informed of Brexit developments – join UKTiE!

4. UK feeling that the EU is not preparing for Brexit enough
Last week Guy Platten, chief executive of the UK Chamber of Shipping, warned that there were going to be delays at ports after Brexit. He expressed dismay that France and Belgium don’t seem to be preparing themselves for a “hard” border. He said “Our feeling is that other countries in Europe are not in any way prepared”.

In response to this our German colleague has summarised the EU and particularly Berlin’s perspective for us this week:

The view from Berlin by IDA Senior advisor Thomas Richter

Officials in Brussels and Berlin believe that they are ready for the upcoming Brexit process. Last week a high-ranking Council official closely involved with the Brexit preparations confirmed to me that the working relationship between EU Council and Commission is now well established and awaiting the notification by the UK. Council President Tusk will circulate first draft negotiation guidelines to EU Member States reflecting the outcome of conversations he held in EU Capitals since the June referendum. The guidelines will primarily cover the principles of the negotiation and will not include sectorial specifics, this will follow later in the EU’s more detailed mandate and regularly updated guidelines throughout the negotiations. Many in the EU do not believe that a deal on the future relationship is a realistic prospect until well after 2019.

What was stressed to me during the exchange and talks in Brussels and Berlin is that the EU will focus on concluding the divorce under Article 50 first before an agreement on the future relationship will be concluded. What has surprised everyone I spoke to over the last couple of weeks is that the EU27 Member States as well as European companies have remained united in their support for the four fundamental freedoms over making individual deals with Britain to benefit their country or industry. It was equally stressed that Europe is not out to punish Britain, regardless of the perception back in the UK. Rather that the is a “willingness to engage” and that the future relationship will be based on a “balance of rights and obligations”, but that the final deal for the UK can never be as good as full EU membership.

5. Shipping, Port and Logistics Interests given more time to advise government on maritime industry
The Government has extended the deadline for written submission to the inquiry announced by the Transport Committee in December to examine the results of the Maritime Growth Study. Among other things the inquiry will consider future Government and industry plans for the maritime sector, and welcomes the expertise the private sector can provide, especially in consideration to Brexit. The new deadline is the 2nd June and will give shipping, port and logistics companies a chance to influence future maritime industry policy and to comment prior to Brexit. If you want help preparing a submission, contact us here.

6. Shadow Chancellor outlines plans for “overlooked” towns in the North-East
Speaking at the party’s regional economic conference at the weekend, Shadow Chancellor John McDonnell said that Labour plans to pump £1.4billion into the North-East’s transport and manufacturing industries in order to combat the impact of Brexit. According to figures for Transport for the North, the investment could unlock £20 billion in economic potential and help create 60,000 jobs. He said that if elected, Labour would oversee the greatest transfer of power to the North of England since the industrial revolution. However, political rivals criticized his ideal portrayal of life under Labour, and said that as long as Jeremy Corbyn is leader, “there is no prospect whatsoever of Labour returning to power in 2020.”

7. Leaked government document warned of the cost and chaos if UK leaves the customs area, even in the event of a free trade agreement
The Times published an article on Brexit, referring to a leaked Government document warning of the negative consequences to follow Brexit negotiations should Britain leave the customs area, even in the event of a free trade agreement being reached. According to the paper, ‘the UK would face a full regime of customs controls when importing and exporting goods between the UK and EU’, with bureaucracy and delays ‘increasing transactions costs by 2% to 24% of the value of traded goods. The documents appeared as a coalition of leading trade bodies came together in an effort to speak with one voice, putting forward a joint statement to four cabinet ministers urging them to secure a soft Brexit with preferential access to EU markets. In their statement, the British Retail Consortium, the National Farmers’ Union of England and Wales and the Food and Drink Federation demanded ‘frictionless trade in goods between the UK and the EU, avoiding costly and disruptive customs checks, processes and procedures’. These industries are presenting a united front, UKTiE is a platform for transport companies to do the same – join us!
8. Open Europe tells Prime Minister May to let go of customs union ambitions
Think tank Open Europe’s advice to Theresa May in these last days before Article 50 is triggered is to let go of the Customs Union, and to avoid “half in, half out” arrangements. According to them, there is no way to continue a friction-less movement of goods after Brexit and continuing access to the Customs Union would mean that the UK would have no voice in striking its own trade deals. This sentiment echoes what the EU has been saying to the UK since the referendum; you can’t have your cake and eat it too. Labour has also this week set out 6 tests that they will use on any Brexit deal the PM puts forward. These test should hold the government accountable to what they have promised to deliver as regards to Brexit.

9UKTiE have also put together the latest timetable for Brexit. We will keep this up to date as the process develops:  

  • 29th March – A50 expected
  • 31st March – first key meeting of EU ambassadors
  • 3rd April – EP to discuss and finalise resolution covering key principles and main issues – Parliament red lines therefore present in negotiations from day 1
  • 11th April – UKTiE Roundtable with key Brexit figures from Parliament, Commission, Council
  • 12th April: UKTiE meets Guy Verhofstadten team
  • 19 April – EU draft negotiations guidelines to be reach for final consultation
  • 23 April & 7 May 2017 – French Presidential elections
  • 29th April – EUCO
  • May/June 2017 – Negotiations formally begin
  • 24 September 2017 – German Federal elections
  • 30 September 2018 – Date by which EU’s chief Brexit negotiator, Michel Barnier, wants to conclude the terms of Britain’s exit from the Union
  • 31 March 2019 –  Date by which Theresa May wants to conclude the negotiations over Brexit
  • May 2019 – Britain formally exits the EU, following ratification of Brexit by all other member states and the European Parliament.
  • June 2019 – European Parliament elections

Mark Watts
UK transport in Europe (UKTiE)

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