Brexit With No Trade Deal ‘Insane,’ Former U.K. Envoy WarnsTim Ross and Robert Hutton
‘That doesn’t stop it necessarily happening,’ Ivan Rogers Says
Theresa May needs ‘biggest ever’ free-trade deal with EU
It would be “insane” for Britain to leave the European Union without a new trade deal, the country’s former envoy to the bloc said as he set out the unprecedented scale of the Brexit challenge facing Prime Minister Theresa May.
The damage to the European economy from a “cliff-edge” Brexit would be serious but the EU is such a “legalistic” body that it will decide all existing contracts with the U.K. must cease on the day the country leaves the bloc, Ivan Rogers told lawmakers in London on Wednesday.
“It can’t be a good state of the world for them either -- there are really severe losses from just cutting off” ties with the U.K., including the impact on the euro zone, Rogers told Parliament’s Exiting the EU Committee. “There are other consequences in other sectors which would make it an insane thing to do.”
Rogers quit as Britain’s permanent representative to the EU in January amid reports of a rift with May’s team over what he saw as their lack of clear, realistic thinking on the difficulties of Brexit. His comments come at a sensitive time for May, who is aiming to trigger the start of exit negotiations in the next five weeks.
Speaking to the committee, Rogers set out his view of the size of the task the premier and her ministers face in the two years allocated for negotiations. It is “the biggest peacetime challenge we have ever faced” and the U.K. is up against “a class act” in the European Commission, which has decades of experience in international trade negotiations, he said.
In order to get the right terms for a deal on commerce between the U.K. and the EU, May will have to pull off “the biggest free-trade agreement ever” struck with the bloc, covering goods, tariffs, financial and professional services, Rogers said. “It has got to be an unprecedentedly good deal.”
However, while some sectors such as German car makers will put pressure on European leaders including Angela Merkel to avoid adding tariffs to trade with Britain, the trade talks will still be “the biggest single negotiation we will ever have conducted across government.”
The first hurdle will be resolving the clash over structuring the talks themselves. The European Commission wants to start with negotiating the exit terms, including the U.K.’s financial liabilities, and then move on to discussing the new trading relationship and any transitional arrangements necessary. Britain, by contrast, wants talks in parallel on both the exit deal and the new free-trade agreement. Rogers said this argument is likely to delay the start of proper negotiations, perhaps until the summer.
“The instinct of the theologians and technocrats of the Commission is that we are more up against it than they are,” he said. EU negotiators will try to maintain unity among the remaining 27 member states over how much money Britain will be asked to pay as an exit fee to compensate the bloc for pension liabilities of EU staff and other costs, he said.
— With assistance by Alex Morales