Out-Law News 3 min. read

BREXIT: EU deal ‘cannot mean membership of Single Market’, prime minister says

The UK will pursue a “bold and ambitious free trade agreement” with the EU as part of its Brexit negotiations, but will not be seeking continued membership of the single market, the prime minister has confirmed.

In a highly anticipated speech setting out 12 priorities for the UK as it negotiates its exit from the trading bloc, Theresa May said the terms of single market membership “would to all intents and purposes mean not leaving the EU at all”.

In her speech, May said that single market membership came at the cost of “accepting the ‘four freedoms’ of goods, capital, services and people” - something which EU leaders had been clear about since the UK’s vote to leave the EU on 23 June 2016.

“Being out of the EU but a member of the single market would mean complying with the EU’s rules and regulations that implement those freedoms, without having a vote on what those rules and regulations are,” May said.

“So we do not seek membership of the single market. Instead we seek the greatest possible access to it through a new, comprehensive, bold and ambitious free trade agreement,” she said.

That agreement “may take in elements of the current single market arrangements in certain areas”, as “it makes no sense to start again from scratch when Britain and the remaining member states have adhered to the same rules for so many years”, May said. A potential example that she gave was the freedom to provide financial services across national borders, something which had previously been highlighted by the UK’s financial services industry as a priority for future negotiations.

May also announced that the final deal agreed between the UK and the EU would be put to a vote in both houses of parliament “before it comes into force”, although she did not indicate what would happen should either house reject the terms of the deal. The Supreme Court is due to rule later this month on whether the government’s decision to trigger Article 50 of the Treaty on European Union and formally begin the two-year Brexit process, something which May intends to do before the end of March, must be subject to a vote in parliament.

Further priorities for the government as indicated by May in her speech include maintaining the common travel area between the UK and the Republic of Ireland; controlling immigration to the UK from the EU; and early agreement on the rights of EU citizens already living in the UK as well as those of UK citizens in other EU member states. The government would also both protect, and build on, the rights of workers set out in EU legislation post-Brexit, she said.

On trade, May said that her preference was for continued tariff-free trade between the UK and EU but not at the expense of enabling the UK to negotiate its own trade deals with other countries, such as Australia, New Zealand and India. This could involve associate membership of the EU’s customs union, remaining a signatory to “some elements of it” or a completely new customs agreement, the prime minister said.

She was also keen for the UK to continue to collaborate with the EU on science, research and technology; and on crime, terrorism and foreign affairs, she said.

May said that although the UK and EU should have “reached an agreement about our future partnership” by the end of the two-year negotiation process provided for by Article 50 of the Treaty on EU, it would be in “no-one’s interests for there to be a cliff-edge for business or a threat to stability”. Instead, both parties should pursue “a phased process of implementation … [which] will give businesses enough time to plan and prepare” for the new arrangements, she said.

“This might be about our immigration controls, customs systems or the way in which we cooperate on criminal justice matters,” she said. “Or it might be about the future legal and regulatory framework for financial services.”

“For each issue, the time we need to phase in the new arrangements may differ … But the purpose is clear. We will seek to avoid a disruptive cliff-edge, and we will do everything we can to phase in the new arrangements we require as Britain and the EU move towards our new partnership,” she said.

May added that she was “confident” that the UK and EU would be able to reach a deal following her recent conversations with senior EU leaders.

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