Trouble underwater
On Monday 27th July, the European Commission issued a proposal to give France a mandate to negotiate an agreement supplementing the Treaty of Canterbury, signed in 1986 between the UK and France to facilitate the construction and operation of the Channel Tunnel.
Currently, the tunnel is regulated by EU standards on railway safety and interoperability, but after January 2021 European rules will only apply to the French half of the link, potentially causing a regulatory headache under the English Channel. Without an agreement on which rules should be followed, train drivers would need two sets of qualifications to operate across the tunnel, and standards could potentially diverge on aspects such as signalling, voltage or ventilation.
The issue is that any deal would need a mechanism to resolve future disputes between the UK and France, a role usually played by the European Court of Justice – and a major red line for the British government in Brexit negotiations. An option could be to give oversight to the international court of arbitration in the Hague, but with five months to go, the light at the end of the tunnel is only getting dimmer for creative solutions.
UK-Japan trade deal nearly bloomed
Trade negotiations between London and Tokyo will continue past the initial 31st July deadline, although a deal is expected to be concluded within days.
The final text is expected to use as a template the economic partnership agreement the EU signed with the Land of the Cherry Blossoms last year, and will include provisions on digital services to make it easier for technology companies to sell their products in Japan and the UK.
However, reports suggest that little progress has been reached on reducing agricultural tariffs on British food exports and ensuring rules of origin protections for British goods.
The government is facing pressure both at home and from Tokyo to conclude the deal at pace. At home, it needs to show the UK is able to negotiate trade agreements on its own and have them in place by the end of the transition period. In Tokyo, negotiators have warned that to meet the tight deadline, a deal must be concluded in August to allow for a vote in the Japanese Parliament in the Autumn.
No time to prepare, say British businesses
A survey commissioned by the Confederation of British Industry (CBI) has found that three in four businesses are worried a no deal Brexit will lead to a further economic shock after the impact of COVID-19.
Furthermore, over half of the companies surveyed reported no change in their level of preparedness for Brexit, with 21% of businesses claiming their preparations have gone backwards since the start of the year.
Leaving the world’s largest trading bloc without a trade agreement would mean the UK and the EU would trade under World Trade Organisation rules, which would introduce tariffs and border costs on a wide range of goods, with further implications for British companies with operations in the EU.
Brexit nimbysm
The residents of Ashford have accused the government of being “sneaky” over its decision to begin construction of an “emergency lorry park” near the town in Kent without consulting them. The 27-acre site, with a planned capacity for 10 000 lorries, will help to ensure the free flow of freight at the border but was labelled a “concrete monstrosity” by nearby dwellers.
Richard Lavender, a representative of Kent Businesses, stated that despite local opposition, up to four additional lorry parks would need to be built throughout Kent to avoid post-Brexit congestion.
Calls for Estonian-style ‘e-Residency’ for Commonwealth entrepreneurs
James Sproule, a former Business advisor to the Prime Minister, has called on Boris Johnson to give entrepreneurs in Commonwealth countries such as Nigeria or Zambia the ability to register their firms in the UK as “e-residents”.
A report authored by Mr Sproule and published by the Centre for Policy Studies argues that the government should follow Estonia’s model of ‘e-residency’ and ‘e-businesses’ to allow entrepreneurs to be able to set up and operate start-up companies from anywhere in the world while adhering to British rules.
Such a scheme, the think tank argues, would stimulate investment and global entrepreneurship in the developing world, giving investors the reassurances of British corporate governance and English law.
The model has proven successful in Estonia, where 10 000 new companies and 62 000 applications for e-residency have been received since the roll-out of the scheme in 2014.
The Whitehouse team are experts in the potential impact of Brexit, providing political consultancy and public affairs advice to a wide range of clients, not only in the United Kingdom but also across the member states of the European Union. More information about our Brexit experience can be found here, or, if you have any questions, please contact our Chair, Chris Whitehouse, at chris.whitehouse@whitehousecomms.com
