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Analysis

EU has 7 burning questions on May’s Brexit plan

by Luke Lythgoe | 20.07.2018

The other 27 EU countries finally got round to marking Theresa May’s Chequers homework today. There was a lot of red ink. “There are issues that we need to understand. They need to be workable,” said the EU’s chief negotiator Michel Barnier, following a meeting with ministers from all the member states. He posed seven key questions on customs alone – all of which May will struggle to answer.

Barnier wants to know if the prime minister’s plan is compatible with: the integrity of the EU’s single market and customs union; the indivisibility of the four freedoms (goods, services, capital, labour); and the autonomy of the EU27’s decision-making after the UK leaves. He said he would be “scrupulously respecting” these points. He knows already that May’s answer will be in the negative.

Seven tricky questions followed:

1. Will agriculture and food standards be guaranteed? The UK plan is only to align standards on goods checked at the border, but agri-food standards (for example, on pesticides or GM crops) are not. How then, Barnier asked, can EU consumers be protected if UK standards end up being lower?

2. How will customs authorities know the final destination of goods?

3. Doesn’t this proposal leave things open to fraud?

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4. What will the costs be to businesses? Without a hint of irony, Barnier warned that “Brexit must not justify additional bureaucracy”. Remember when Leavers were shouting about Brexit being a great way to cut red tape?

5. What happens if the UK makes its tariffs lower than EU tariffs? If, as raised in previous questions, this complex system of collecting each other’s customs duties isn’t watertight, then there’s a risk of goods being imported into the UK more cheaply, and then making their way into the EU – costing the EU27 customs duties.

6. Is it even legal for the EU to hand the application of its tariffs over to a third country (which is what the UK will be)?

7. Will EU states be vulnerable to unfair competition in services? Leaving services out of May’s plan means standards won’t be aligned in the same way as goods. But it’s more complicated than that because the value of many goods also includes services. Barnier held his phone aloft and explained that 20-40% of its value came from services.

Barnier said he will “look constructively at answers” from the UK. He then moved on to the equally thorny issue of the Irish border, which is explored by Quentin Peel for InFacts here.

The prime minister will struggle to answer these fundamental points without suffering more political fallout, with Brexiters in her Cabinet like Andrea Leadsom demanding that the Chequers plan must be the UK’s “final offer” to the EU. With negotiations continuing into the summer, May’s going to feel the heat.

Edited by Quentin Peel

11 Responses to “EU has 7 burning questions on May’s Brexit plan”

  • In 2017 at a time when the UK was a member of the EU ,the EU Court of Auditors criticised HMRC as the worst performing member state in its collection of EU customs duties.

    How can the UK seriously expect the member states to accept a plan which would involve the UK acting as its collecting agent when no longer a member of the club when its record as a member was less than stellar ?

    it obviously cannot ; nor would the UK accept such a plan were the situation reversed.

    The only alternative would be for the member states to mark HMRC’s homework – at extra cost to those member states to be paid by them presumably.

    Barnier is clearly a very polite man ….

  • ‘Today’s aggressive comments by Messrs Varadkar and Barnier show why we are right to be leaving the mafia-like European Union.’ (A tweet from Rees-Mogg made this afternoon.)
    Looks to me as if the aggressive language is coming from the posh, suited and booted ex Etonian who clearly believes God put him on this earth to rule us all for our own good. This is the Toryism of 250 years ago when the country had Tory clerical magistrates preaching labourers to accept their lot on Sunday and hanging them on Monday. Rees-Mogg thinks the UK should send in the gunboats to sort out the ‘troublesome foreigners’. He and his ilk have not moved on. The man is in a time warp.

  • Funny this – I always imagined that a phone was an object – a good, not a service.

    Heaven forbid that anyone should imagine that Monsieur Barnier might be nit-picking

  • “the value of many goods also includes services. Barnier held his phone aloft and explained that 20-40% of its value came from services.”

    Heaven forbid that anyone should suggest that M Barnier might be nit-picking. Surely however, whereas the physical phone is a good, a telephone connection is a service, and the two are separate, aren’t they?

  • May’s position has not changed at all and all their efforts have gone into re phrasing the same conditions that her team (?) want over and over again. The EU bunch don’t even have to really study any new proposals offered up by May knowing full well it will be basically the same old thing. How does Cameron stand on these issues nowadays? is he still a brexit booster or has he seen the error of his thought processes and decided to do what is best for Britain? Bin article 50 and get on with life is the best solution.

  • Yes, a phone is a good, but the software that turns a lump of metal, plastic and electronic components into a working phone is a service. Sort that out TM.

  • Sadly Margot a smart-phone without the associated services is a no-no. This is the problem many products are now integrated with digital systems and will not function without the complex digital links. About 40% of the cost of an Airbus is in the digital Flight and Engine Management systems and the computerised design process. without the services side it is just an attractive piece of aluminium and carbon fibre. How Theresa May is going to define what is a product and what is a service is a mystery.

  • The answer to question 2 “How will customs authorities know the final destination of goods?”, obviously, is “time-travel”. Piece of cake for the nation that gave the world Dr Who.

  • William Lonergan, no doubt whatever definition Mrs May give for goods as opposed to services it will be “absolutely clear” and mean absolutely nothing.

  • Dominic Raab, new Brexit minister, says an EU deal can be done by October. I think that must be assuming the EU agree to his entire plan without further dispute. You can see what this is designed to do. Set the EU up as the guilty party for when the inevitable happens and no agreement is reached. The Brexiteers probably calculate that they can win extra support, if they can portray the EU as unreasonable.

  • Revoke Article 50 is the only way out of this mess. Otherwise it could take at least 10 years or over for this country to recover economically. I expect some Britons will emigrate – some to the European mainland, others to countries such as Canada or Australia.