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News > United Kingdom

'Hard Brexit' Proposals Means Further Trade Liberalization

  • Pro-Brexit protesters demonstrate outside the Houses of Parliament in London, UK, Mar. 13, 2019.

    Pro-Brexit protesters demonstrate outside the Houses of Parliament in London, UK, Mar. 13, 2019. | Photo: Reuters

Published 13 March 2019

British politicians continue to disagree 16 days before the United Kingdom is due to leave the European Union.

The United Kingdom House of Commons Speaker John Bercow presented Wednesday two proposals regarding a “Hard Brexit,” or no-deal departure from the European Union (EU) on Mar. 29, 2019.

UK Parliament Rejects May's Latest Brexit Deal...Again

While the first alternative rejects a no-deal Brexit at any time or under any circumstances, the second proposal seeks to delay Brexit until May 22 so that the U.K. can prepared for a non-negotiated departure. This last initiative, which is known as the 'Malthouse Compromise,' (named after Housing Minister Kit Malthouse who first pushed dialogue) wants a transition period that would last until Dec. 2021.

All these scenarios are under analysis given that Parliament Tuesday ruled out leaving the E.U. under the terms proposed by Prime Minister Theresa May. If parliamentarians reject a hard brexit again, they would then debate a postponing of Brexit. The E.U., however, expressed doubts about this option Wednesday.

At the European Parliament, both the European People's Party (EPP) and the Progressive Alliance of Socialists and Democrats (S&D) urged the U.K. to call a second referendum on staying in the EU.

The European Brexit Negotiator Michel Barnier indicated that the U.K. should, rather than requesting a delay, define what kind of relationship it wishes to establish with the E.U..

Delaying Brexit may not be easy when considering the next European parliamentary elections, which will take place between May 23 and 26, because the U.K. could be forced to elect MEPs.

"There is no justification for a single day of enlargement if the British do not explain to us what they will use that extra time for," Manfred Weber, the European Parliament EPP leader, said and stressed that "the logical thing" to do would be to ask citizens what do to on Brexit.

Guy Verhofstadt, who is a former Belgian prime minister and is currently an MEP, opposed "any kind of extension, even one day," arguing that the European elections would be sequestered by the Brexit in case of a delayed decision.

Meanwhile, Prime Minister May presented Wednesday a temporary tariff policy, which would be applied for twelve months from March 29, 2019.

According to her proposal, the U.K. will apply an 87% tariff on imports, especially on goods from outside the EU block. Approximately 13% of the taxed imports will be related to dairy products and meats, since London seeks to protect British farmers from cheap imports.

Imports from Northern Ireland and the Republic of Ireland will not be subject to such tariff scheme. The U.K. entrepreneurial associations, however, did not accept May's proposal.

The 12-month tariff policy would be "a blow to U.K. economy," Carolyn Julie Fairbairn, Director-General of the Confederation of British Industry (CBI), said and lamented that companies "would not have time to prepare" for the biggest trade liberalization since 19th century.

The new tariffs "would create new winners and losers from one day to the next," Adam Marshall, Director-General of the British Chambers of Commerce (BCC), said, forecasting that a Hard Brexit would have an "unwanted impact" for many economic sectors.

The U.K. government also reduced its growth forecasts Wednesday for the coming years due to the chaotic effects from an unfinished, or indefinite, Brexit.

Economy Minister Philip Hammond, who once said that Brexit creates "a cloud of uncertainty about the economy," pointed out that U.K. production will grow by an average of 1.2% in 2019, only 1.4% in 2020 and about 1.6% in the next three years.

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