Brexit secretary David Davis was in Brussels today for the official start of negotiations ©PA Images
Brexit secretary David Davis was in Brussels today for the official start of negotiations ©PA Images

Business calls for free trade as Brexit talks start

19 June 2017

The UK’s biggest business bodies have called for continued free trade with Europe and frictionless borders in an open letter to the government.

Timed to coincide with the beginning of Brexit negotiations, the letter said the government must listen to the business community throughout the negotiations and a final agreement between the UK and EU should including tariff-free trade, minimal customs bureaucracy and a flexible system for movement of labour.

The letter, signed by heads of the British Chamber of Commerce, CBI, EFF, Federation of Small Businesses and the Institute of Directors, accepted the decision to leave the EU but said the government would be in a stronger negotiating position if it drew on the expertise of business.

“We call on the government to ensure that negotiations take place in an atmosphere of mutual respect, and engage continuously with UK business interests,” it said.

It calls for a smooth transition process out of the EU by prioritising an early agreement on the rights of EU citizens in the UK and UK citizens in the EU, maintaining the benefits of the single market and customs union and keeping borders between and within the island of Ireland open.

The business bodies also want the two parties to agree to maintain equivalent regulation and standards and for continued UK involvement in selected pan-European programmes. The letter also called for the UK to keep benefiting from free trade agreements it is currently party to through the EU.

The letter echoes the results of a survey of SMEs published earlier this month by the Harvard Kennedy School. Co-written by ex-shadow chancellor Ed Balls, the research included interviews with more than 50 SMEs and trade associations. It found all of the businesses would prefer to remain in the single market and customs union and were concerned about the impact both tariff and non-tariff trade barriers would have. 

Companies were also concerned that Brexit could increase their regulatory burden if UK regulations start to diverge from the EU’s, and immigration regulations would become more burdensome.

Speaking in Brussels at the start of the official negotiations, and under the shadow of this morning’s terror attack in London, Brexit secretary David Davis said he would work to build a “deep and special partnership” with the EU. “It is at testing times like these that we are reminded of the values and the resolve we share with our closest allies in Europe,” he said. 

“While there will undoubtedly be challenging times ahead of us in the negotiations we will do all that we can to ensure we deliver a deal that works in the best interests of all of our citizens. To that end we are starting this negotiation in a positive and constructive tone, determined to build a strong and special partnership between ourselves, our European allies and friends.”

Separately, the Irish business body Ibec released a report in which it called for a temporary state aid framework to be installed to help “address the economic fall out of Brexit”. It said this framework, funded by EU and domestic sources, should make available of 5% of the value of export sales to the UK, which some have valued at between €300m-400m.

Ibec argues Ireland is particularly at risk of economic disruption caused by Brexit, and says state aid is allowed under single market rules to remedy a serious disturbance in the economy of a member state. It wants the money to be spent on supporting innovation, market diversification, upskilling and capital investment.

Danny McCoy, Ibec CEO, said, “Any deal must recognise the unique economic and political challenge for Ireland and include a range of specific measures to address these. An early focus on avoiding a hard border with Northern Ireland is vital, but the Irish approach must also be informed by the greater economic importance of the east-west Irish-British trading relationship.”

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