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Interview: Welcome sense of urgency on Brexit negotiations: Leave group official

Source: Xinhua| 2017-12-28 23:03:22|Editor: Mu Xuequan
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LONDON, Dec. 28 (Xinhua) -- One of the leaders of the Brexit camp has praised the progress that British Prime Minister Theresa May has achieved in negotiations with the EU.

"I have been surprised by how phase one has been conducted but I think that it is very good that Theresa May got over the line," Matthew Elliott, former chief executive of the Leave group, told Xinhua in a recent exclusive interview.

"We are now starting the discussions proper, and the other thing that has heartened me is the fact that the EU wants to get a deal done and there is a sense of urgency on both sides," he added.

Elliott's Vote Leave organization was a cross-party group which shouldered the major work in persuading voters to back Brexit. He always believed in a Brexit that saw Britain outside the customs union and the single market, and with a trade deal allowing access to the EU.

Elliott was pleased that May had followed that direction so far in Brexit negotiations.

"I think that May underlined that we would be leaving the single market, leaving the customs union, leaving the jurisdiction of the European Court of Justice (ECJ). That does not preclude Britain having trade with the single market, because I am confident there will be an EU-UK trade deal," he said.

The logic, said Elliott, was that to benefit from full national sovereignty Britain needed to quit the single market and customs union and carve out its own trade deals across the world and with the EU.

"With the customs union, it is essential we leave that so we can regain control over trade policy, otherwise Brexit will have been for nothing if you cannot do your own trade deals."

Both sides had made concessions during the first phase of the negotiations, he said, with Britain allowing ECJ jurisdiction to continue for a limited period after Brexit.

TRADE DEALS

With the first phase of Brexit negotiations completed, and with both parties now focusing on the second phase, the key idea of a trade deal has come into focus.

Discussion in Britain has used several existing EU trade deals as models around which to discuss what a future trade deal should look like.

Elllott believed the Norwegian-style European Economic Area (EEA) model would be a poor deal for Britain.

The other model which features in many discussions is the Comprehensive Economic and Trade Agreement (CETA) deal between the EU and Canada.

The deal reduced or eliminated tariffs on goods, but took several years to discuss and several years to ratify. "I think a Britain-EU trade deal would be much quicker than that. When Canada was negotiating with the EU there regulatory systems were completely different, so half the trade deal was covering how various areas needed to be ironed out and there were aspects of environmental regulation in there," said Elliott.

"With an EU-Britain deal we are already fully convergent, we are part of the single market; we have the same regulations and directives as the rest of the EU. So, it should in theory be a much simpler deal to do."

CONVERGENCE, DIVERGENCE

After Brexit, Elliott predicted Britain and the EU would still be closely linked but would pursue divergent paths.

Britain's would take it in a more independent direction, while nations within the EU would be closely examining the virtues of drawing closer together while giving up more of their sovereignty.

"I see the EU going in a much more federal direction, perhaps the direction originally envisaged by some of the architects of the EU. It seems like a natural separation from where the UK is to where the EU wants to go," said Elliott.

"There were some fears post-referendum that Europe was breaking apart and this was a very uncertain time, and what does this mean for geo-politics and peaceful cooperation?"

"Hopefully, now people will see that now we have reached the end of the phase one negotiations that a Brexit settlement is emerging where the EU will be on friendly, good neighborly terms with the UK."

"There will be a trade deal and we will be cooperating on security, that will be discussed more in phase two but May has shown she is willing to cooperate."

CITY OF LONDON

With the Brexit talks set to enter phase two, the importance of a settlement which deals with financial services will come to the fore.

The City of London, the financial sector in the British economy, is a global financial hub providing services and capital liquidity, a useful asset for EU firms and sovereign bodies.

Banks in Britain underwrite around half of the debt and equity issued by EU companies and act as counterparty to more than half of the over-the-counter (OTC) interest rate derivatives traded by EU companies and banks, and Britain-located asset managers account for 37 percent of all assets managed in Europe.

"The number of people working in financial services in the UK has gone up since the Brexit vote, Elliott said. "I think that the City of London is in a stronger position than some commentators like to suggest."

"The pre-eminence of the City of London happened far before Britain joined the EU or the EU started entering the area of financial services so it is predated that by a long time," said Elliott.

The EU would be making a mistake if it sought to restrict all the activities of the British financial sector within the bloc after Brexit, said Elliott, and it would be beneficial for all parties to reach a pragmatic agreement.

Elliott said: "On regulation it is easy to understand why the EU want British financial services regulation to match that in the EU, but Britain goes above and beyond, and I think that is one reason why people feel comfortable doing business here because they know it is regulated to a high standard."

"That to me points to a situation where Britain will continue to have passporting rights (for financial services) into the EU because it goes above and beyond EU financial services regulation."

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