London, 2 March 2018 — Theresa May has today set out in more detail than ever before the bold future relationship that the UK Government believes to be in the interests of both the UK and the EU. She tackles head on the accusation that any bespoke deal amounts to cherry-picking, recognising that there needs to be a fair balance between benefits and obligations. She accepts in terms that, where the EU or UK choose to move away from regulatory alignment, that will come with consequent losses in access to each other's markets.
That is one of the "hard facts" for both sides, and the ball is now in the EU's court to respond to the five foundational principles that Mrs May set out, and to confirm whether it regards this as a legitimate basis on which to negotiate. We may have the answer at the next EU summit on 22 March.
The Prime Minister has elaborated on the UK's "three buckets" and what falls within each. She has confirmed a clear desire for the UK to be associate members of EU agencies in the aviation, medicines and chemicals sectors, acknowledging that that means following their rules, paying their bills and accepting the remit of the ECJ — although noting that there is precedent (particularly in Switzerland) for regulated businesses to bring disputes before the national courts rather than being subject to ECJ jurisdiction.
Strikingly the Prime Minister specifically called out areas, such as broadcasting, which have not previously addressed in free trade agreements, meaning any agreement reflecting the UK's position would need to break new ground
In other areas, her speech reveals a new granularity of analysis, which may comfort businesses concerned about whether the UK has a plan. For example, in financial services, the Prime Minister has articulated a clear vision based on mutual recognition, outcomes-based regulatory alignment, proportionate consequences where the two sides wish to move apart and a robust system for consultation and resolution.
Mrs May has indeed confronted some hard facts. Both the UK and the EU still have hard questions to answer and hard work to do, but this is a credible basis for negotiation of the future relationship.
The press release can be found here.
