UK banks face ‘more granular’ EU Brexit equivalence assessment than other sectors (MLex)

  • In a series of slides presented to EU governments on Friday, the commission’s Brexit task force set out its approach to the negotiations, which will include the text of a negotiation mandate with “no surprises.” The formal talks with the UK will begin after the country leaves the bloc on 31 January.
  • In financial services, the UK and EU have agreed to use the bloc’s existing equivalence regime, which grants the commission the right to open and close market access to companies from other countries in around 40 fields. The UK has created a similar regime to operate post-Brexit.
  • As a major financial hub that is deeply integrated in the EU market, the UK will need to hew much more closely to the EU rulebook than more distant centers, the presentation indicates.
  • This is in line with normal EU policy to ensure that the assessments are “risk-based and proportional,” it says. For any country, “the higher the possible impact on EU markets and interests, the more granular the assessment.”
  • Under the draft political declaration that accompanies the Withdrawal Agreement, the EU has committed to “endeavoring” to conclude its equivalence assessments on financial services by the end of this June, and to have completed an adequacy decision on data transfers by the end of the year.
  • The parties also commit to using their “best endeavors” to ratify an agreement on fisheries — where the UK has the upper hand given its large fish stocks — by 1 July this year.
  • Chief negotiator Michel Barnier has warned that the compressed timetable will require the two sides to focus on a smaller core of issues: a free-trade agreement in goods, fisheries and security cooperation.
  • The transition period is due to expire on 31 December 2020. It could be extended, but Johnson has ruled this out.

CBI urges government to include business in post-Brexit trade talks (FT)

  • Businesses need to be brought into the UK’s post-Brexit trade talks with the EU and US, according to Britain’s largest employers’ group, which has drawn up a series of recommendations to try to influence upcoming negotiations.
  • In a report published on Monday, the CBI calls on the UK government to ensure it works with businesses “closely, comprehensively and transparently throughout every stage of negotiations, from mandate setting through to implementation”.
  • The CBI said in the report that it had created a “template” for a “world-leading trade policy based on lessons from international best practice”, with engagement between government and business at its core.
  • Along with other business lobby groups, the CBI is looking to deepen its dialogue with the government after the victory by Boris Johnson’s Conservatives in the December general election, and after a period when relations between the two sides were strained by the first phase of Brexit negotiations that culminated in the UK’s withdrawal agreement with the EU.
  • The UK needs to start with a defined and public mandate on trade deals that looks at each area of the economy and gives British negotiators clear objectives, according to the CBI.

Boris Johnson Seeks to Calm Northern Irish Concern Over Brexit Plan (Bloomberg)

  • Prime Minister Boris Johnson sought to assuage concern in Northern Ireland that his Brexit deal will economically cut off the region from the rest of the U.K.
  • Some trade experts say, even if there’s a Free Trade Agreement with the bloc, checks will be needed between GB and NI to ensure goods going to Northern Ireland from the rest of the U.K. meet EU standards.
  • Boris Johnson was in Northern Ireland to meet with the leaders of the power-sharing executive, which was restored over the weekend after three years of deadlock. The assembly will regularly have a vote on the Brexit arrangements Johnson negotiated for Northern Ireland, with the first ballot in Belfast set for four years after the end of the transition period.
  • “The arrangements that we have put in place under the Northern Ireland protocol automatically evaporate after 4 years unless the assembly decides that they want to protract them,” Johnson said. “So there are plenty of protections for Northern Irish business, farmers and others.”