Brexit Begins: UK’s symbolic exit from the EU sets stage for tough trade negotiations

Britain’s tumultuous 47-year membership of the EU ended at 11pm on Friday night, in an unprecedented blow to the process of postwar integration on the continent, reported the Financial Times. “For all its strengths and its admirable qualities, the EU has evolved over 50 years in a direction that no longer suits this country,” UK prime minister Boris Johnson said in a choreographed speech. “If we can get this right, I believe that with every month that goes by, we will grow in confidence not just at home but abroad. I know that we can turn this opportunity into a stunning success.”

The Guardian reported Friday was marked by mixed emotions across the UK which showed the UK is not yet at ease with itself, while the Telegraph reported Boris Johnson is preparing to impose full customs and border checks on all European goods entering the UK after Brexit, in a ramping up of pressure on the coming EU-UK trade talks.

Johnson’s strengthened parliamentary majority is expected to seek a autonomous free trade agreement with the EU, which is keen to strike as closer alignment with the UK as possible, to prevent Britain from benefiting from economic advantages in its independent trade agreements with world economies. The EU is determined to ensure the former second-largest net contributor to the EU’s annual budget does not turn from economic ally to rival. Contested ground will centre on market access, security, data protection rules, alignment of regulations, across industries as diverse as fishing to financial services. The UK is aiming to strike deals around the world to cover 80% of Britain’s trade within three years.

There was somber reflection from the Continent on Friday. “This is a deep cut for us all,” German chancellor Angela Merkel said. French president Emmanuel Macron added: “This departure is a shock. It’s a historic alarm signal that should echo in each of our countries, be understood across Europe and make us think.”

“Britain’s priorities should be stabilising relationships with existing trade partners and regaining their trust,” wrote Sam Lowe, a senior research fellow at the Centre for European Reform in London. “It should develop a clearer idea of what it wants its freshly independent trade policy to achieve, and why. In the coming years the UK will need to convince trade partners that it has a constructive role to play in an era where openness to trade is on the wane. At the same time, it must be honest about its limited ability to shape the global trade agenda. The UK’s trade relationship with the EU remains its most economically important one. Yet the UK’s desire for full control over domestic regulation and trade policy significantly limits the potential scope of the EU-UK relationship.”

The Brexit roundup follows in today’s second story.

james.wallace@realassetmedia.com