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04/12/2016

Johnson: UK can leave EU customs union and maintain free trade at the same time

UK & Europe

Johnson: UK can leave EU customs union and maintain free trade at the same time

Boris Johnson and Slovak foreign minister Miroslav Lajčák [R].

[Council]

Britain will probably have to leave the European Union’s customs union when it quits the EU but it can maintain free trade with the bloc, British Foreign Secretary Boris Johnson was quoted as saying yesterday (15 November).

Johnson said in a newspaper interview that he believed Britain could have control over immigration while also keeping the benefits of access to the single market such as “passporting” rights for banks in Britain to do business in Europe.

5,500 UK-based finance firms could lose EU 'passporting' rights

The ‘passport’ rights allowing 5,500 British-based financial firms to operate freely across the European single market are at stake in the fallout from Brexit, posing a ‘significant’ risk to the finance sector, the country’s financial watchdog has revealed.

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“We want to leave the EU legal framework and treaties. We will probably have to leave the customs union, but that is a question that will be discussed,” Johnson told Czech daily Hospodarske Noviny, in remarks published in Czech.

“I believe it can be done and at the same time maintain free trade and growing European economies.”

He said “no” when asked whether he could imagine losing access to the single market.

Asked about Johnson’s comments on the customs union, a spokeswoman for Prime Minister Theresa May said: “The foreign secretary reflected the government’s position which is that a decision hasn’t been taken.”

Freedom of movement ‘a myth’

Johnson told the Czech paper that the free movement of people – which along with the movement of goods, capital and services, is one of the EU’s “four freedoms” – was not a “founding principle” of the bloc, implying that it was not as fundamental as the single market.

“Everybody now has in their heads that every human being has some basic, God-given right to go and move wherever he wants. But it is not so. It never was a founding principle of the European Union. It is an utter myth.”

Juncker tells UK: No single market without freedom of movement

Britain will need months of preparation before Brexit talks can start, EU Commission President Jean-Claude Juncker said on Monday (26 July), adding there would be no single market without accepting freedom of movement.

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German Chancellor Angela Merkel said on Tuesday that the EU could not separate the four freedoms to allow Britain to restrict immigration from the bloc while retaining tariff-free access to the market of close to 500 million people.

But she opened a door to discussions on the principle of the free movement of people, in a potentially significant development for Britain, where controlling immigration was a major issue for many of the 52% of Britons who backed leaving the EU.

Britain plans to trigger divorce proceedings with the EU by the end of March by invoking Article 50 of the EU treaty serving notice to its 27 partners of its decision to leave the bloc. The article sets a two-year period for exit talks.

Ring-fencing Scotland’s single market membership

In the meantime, Scotland’s devolved parliament called yesterday for the British government to ring-fence its European Union single market membership even as Britain exits the bloc.

Although the United Kingdom as a whole voted to leave the EU in a June referendum, Scotland voted to remain and says it therefore has a case for a separate deal with Brussels.

Brexit vote pits London, Scotland against middle England

Britain’s vote on European Union membership on Thursday is set to split regions against regions, with Scotland and the main cities expected to back remaining while the English countryside votes out.

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The ruling Scottish National Party (SNP) tabled a motion in the Holyrood parliament hoping to attract cross-party support for protecting the advantages Scotland enjoys as part of the EU and to better argue its case in negotiations with the UK government in London as it charts Britain’s path to exit.

“Scotland is currently the most attractive region outside of London for overseas inward investment, and maintaining a pathway to the single market is a key factor for many international companies who choose to base themselves here,” Economy Secretary Keith Brown said.

But the motion was passed with just the support of the other pro-independence party, the Scottish Greens.

Other political parties refused to back it because they fear the devolved government will use demands for a special deal for Scotland as a springboard for another plebiscite on Scottish independence.

Scots rejected secession from the UK by a ten-point margin in 2014.

Brexit chaos puts Scottish independence back on the table

Scotland’s government will publish a draft bill for an independence referendum next week as a last resort if it cannot keep close EU ties when the UK leaves the bloc, First Minister Nicola Sturgeon warned today (13 October).

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