UK: Leaving the single market - AmpGFX

Greg Gibbs, Director at Amplifying Global FX Capital, notes that the PM May made it clear, the UK understood it was leaving the EU Single Market. 

Key Quotes

“As such, it places in jeopardy freedoms of trade that support the UK economy.  But of course, this should be no surprise to anyone.  The uncertainty this creates is not new.  But May is seeking as much freedom as she can on trade with Europe.  Uncertainty prevails, but May is making all the right noises as a reasonable and supportive partner for Europe, providing the opportunity for a future trade deal to not be punitive.”

“She said, “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.

That Agreement may take in elements of current Single Market arrangements in certain areas – on the export of cars and lorries for example, or the freedom to provide financial services across national borders – 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.”

“Red lines and veiled warning

May argued firmly that punitive actions by Europe would be in neither the EU’s or the UK’s interest, and said, “Britain would not – indeed we could not – accept such an approach. And while I am confident that this scenario need never arise – while I am sure a positive agreement can be reached – I am equally clear that no deal for Britain is better than a bad deal for Britain.

Because we would still be able to trade with Europe. We would be free to strike trade deals across the world. And we would have the freedom to set the competitive tax rates and embrace the policies that would attract the world’s best companies and biggest investors to Britain. And – if we were excluded from accessing the Single Market – we would be free to change the basis of Britain’s economic model.”

“May mentioned all the benefits the UK provides to Europe, including the export and investment revenue European companies gain from the UK.  But perhaps, more importantly, she outlined the support the UK military and intelligence services provides to the EU.  The purpose was, of course, to illustrate that the UK is not without negotiating power in the coming Brexit discussions.”