Brexit negotiations
Brexit negotiations are underway. The first of the monthly rounds took place in June and July; the next is due at the end of August. Focus has been on the rights of U.K. citizens in the European Union and EU citizens in the U.K., on the border between the Republic of Ireland and Northern Ireland, and on the amount of money the U.K. will need to pay on leaving. Until these and other separation issues are resolved, the U.K. has been told there will be no negotiations on a trade relationship. Prime Minister Theresa May’s office recently confirmed that a series of policy documents will be issued giving more detail on the U.K.’s negotiating positions.
Brexit transition
Increasingly audible are calls for a transition period after the U.K. leaves at the end of March 2019, through which a new and longer-term U.K.-EU relationship can be agreed. A “transitional agreement” has been called for by the U.K.’s Institute of Directors (IoD). In its Bridging the Brexit Gap: Options for Transition report, the IoD argued that without such an agreement, business could face “short-term chaotic cliff edges.”
Brexit uncertainty
The complexity of negotiations is now being reflected in wider concerns about what the U.K.’s departure will look like. Every day a new impact is up for discussion: drug trials, nurse staffing levels, fruit harvesting, security and so on. As a result, the most reliable word is uncertainty (ironically) – and it looks set to stay a consistent word until there is some.
Whilst measures might not take effect until the U.K. leaves, the uncertainty itself is having an economic effect. U.K. Chancellor Philip Hammond said: “There is a large amount of business investment that is being postponed until business can see more clearly what the likely outcome of these discussions is.” And Bank of England governor Mark Carney said: “It’s evident in our discussions across the country … that uncertainties about the eventual relationship are weighing on the decisions of some businesses.”
U.K. economy
U.K. growth for 2016-17 was slightly higher than that of the eurozone as a whole, but the Bank of England marginally reduced the U.K.’s growth forecast for 2017 to 1.7% from the 1.9% prediction made in May. It also marginally cut its forecast for 2018 to 1.6% from 1.7%. The British pound showed no signs of strengthening, as it dropped to a nine-month low against the euro, falling 0.76% to €1.1063. Interest rates were held at 0.25% (where they’ve been since August 2016).
Crossing the Atlantic: PM Trudeau
Headlines from the G20 were, predictably, all about Trump-Putin. The handshake and the body language. Honoured or delighted. Election interference or not. Meanwhile, Canadian Prime Minister Justin Trudeau moved closer to German Chancellor Angela Merkel and French President Emmanuel Macron – reasserting their intent to realize the Paris climate change commitments and highlighting the Canada-European Union Comprehensive Economic and Trade Agreement. In a pre-G20 stop in Dublin, close discussions were held with Irish Taoiseach Leo Varadkar, and in Scotland, a private audience with the Queen.
Crossing the Atlantic: business
The immediate run-up to the annual slower summer period saw a flurry of business activity. Businesses from British Columbia attended trade shows and conferences in Europe: in energy, a fuel cell conference; in animated film, a festival in Annecy; in documentary film, a festival, Sunny Side of the Doc, in La Rochelle; and in information and communication technology, London Tech Week. In life sciences, a group of B.C. companies attended Bionnale in Berlin, as well as holding specific meetings there and in London and Munich. The three-stop visit introduced the capabilities of B.C.’s life sciences sector to the European market. •
Rupert Potter is a U.K.-based writer, speaker and diplomat who has worked in Jordan, Bahrain, Sweden and Canada. His career has included work with the U.K. government. He currently runs an independent consultancy.
