Industry reacts to PM’s landmark Brexit speech

The UK will trigger Article 50 in March and it is expected that negotiations will be complete within two years.

Despite leaving the Single Market, the PM is aiming for the UK to effectively have a free trade arrangement with the EU.

May said: “We seek the greatest possible access to the Single Market through a new, comprehensive, bold and ambitious free trade agreement.”
 
The Freight Transport Association supports the Prime Minister’s vision of Britain’s likely future relationship with our European and global trading partners and her commitment to “tariff-free and frictionless trade” with the European Union and to ambitious free trade agreements with other partners globally.

It said the statement allows FTA to identify where the new ‘friction points’ in international trade could occur and work with the government to negotiate the best possible outcome for UK businesses. 
 
The Prime Minister’s speech yesterday is being dubbed as her clearest indication yet of the deal she wants with the EU – UK access to the European Single Market but no membership of it and a tariff-free customs union with Europe but freedom to sign deals with other countries.
 
Managing Director of logistics operator Europa Worldwide, Andrew Baxter (pictured) – a vocal supporter of the Vote Leave campaign – says the PM’s aims are welcome.
 
He said: “I was pleased to hear the resolve and conviction in the Prime Minister’s speech yesterday, which outlined the type of Brexit I expected and support. On all things other than the customs union – such as immigration control, leaving the single market and control over our own laws – I felt Mrs May was crystal clear.

“In regards to the customs union, I’d like to see the most simplified system of trading between the UK and Europe as possible, with as few barriers as possible. If customs clearance is reinstated, it is vital that the government understands the need for greater resources to accommodate the system to ensure goods can be cleared as quickly as possible.
 
“I’d like to see a 24 hour customs clearance system which would massively speed up the movement of shipments. I’d also suggest the government creates a working group to look at how to optimise customs clearance if it is reinstated.”

Less optimistic

Malcolm Barr, Economic and Policy Research at JP Morgan was less optimistic.

He said: “One might expect a successful negotiating strategy to have ambitious objectives and a credible fall back position. May certainly has the former. But we doubt the Prime Minister has the latter.

“The notion that the UK can simply “fall back” to WTO rules (as summarised in “no deal is better than a bad deal”) is, in our view, very dangerous. Significant parts of the UK service sector would, under these conditions, lose their ability to provide services to EU-based counterparties overnight. 

“Much of the plumbing that supports trade in goods and services on a day-to- day basis would be left without defined administrative processes and legal foundation. The imposition of tariffs is almost a side show relative to these issues.

“We assume that the EU will not seek a punitive arrangement for the UK, only that it will negotiate guided by its legitimate self-interest. Even so, we see a high likelihood of a disruptive and damaging outcome.”