Amid some mixed noises on Brexit coming from some quarters – notably Chancellor of the Exchequer Phillip Hammond – the UK government has reaffirmed it’s commitment to leaving the customs union.
This week, Brexit minister David Davis and Prime Minister Theresa May have met with EU negotiator Michel Barnier for the first talks since the EU approved the move to phase two of negotiations back in December. The pressing issue for both sides is the nature of the transition period, during which Britain seeks to retain access to the single market and customs union whilst being free to negotiate trade agreements with other nations. This is planned in order to ensure a ‘frictionless’ withdrawal and avoid a ‘cliff edge’ for both businesses and citizens.
Leaked document increases tension
As ever, difficulties persist at home for the government with rumbles of discontent coming from the more enthusiastic Brexit supporters. The Prime Minister and David Davis are under increasing pressure to not be seen to be giving further ground. This pressure has increased following reports of a leaked draft document in which the EU proposes certain restrictions on UK access to the single market during the transition phase.
Warnings of drop in manufacturing exports
The Guardian reports on a study by the University of Sussex, analysing the impact on various sectors of the economy. The headline warning is that in the event of new barriers to trade with Europe, manufacturing exports will be hardest hit. The report suggests that any new trade arrangements agreed with third countries will only go so far in offsetting these losses. See below for a link to the study.
Which Manufacturing Sectors are Most Vulnerable to Brexit? (UK Trade Policy Observatory, University of Sussex)