• US takes tough line with UK on post-Brexit trade talks (FT): On Thursday the US released its “negotiating objectives” for a possible trade agreement with the UK, suggesting Britain is unlikely to get softer treatment than other US allies. In the 18-page document, Mr Lighthizer’s office said it was seeking “comprehensive market access for US agricultural goods in the UK” through the reduction or elimination of tariffs. A similar request has proved to be an issue in negotiating an EU-US trade deal. Furthermore, the US is looking for the UK to remove “unwarranted barriers” related to “sanitary and physiosanitary” standards in the farm industry. On currency, the US wants to “ensure that the UK avoids manipulating exchange rates in order to prevent effective balance of payments adjustment or to gain an unfair competitive advantage”. Currency matters have traditionally been excluded from trade negotiations, but the Trump administration has included them into recent talks, including with China and Japan. On industrial goods, the US said it was aiming for “comprehensive duty-free access” and stronger “disciplines to address non-tariff barriers” from the UK. In digital trade, which is rapidly expanding, the US wants “secure commitments not to impose customs duties on digital products”, such as software, music, video and ebooks, and “non-discriminatory treatment” of content.
  • No-deal Brexit tariff quotas to remain unchanged (MLex): According to MLex, the US, New Zealand, Brazil and other major exporting countries would have to compete with EU producers for preferential access to the UK for sensitive products subject to import quotas under a no-deal Brexit scenario and similarly they would face competition from UK producers in exporting such goods to the EU. The EU-UK deal on the post-Brexit split of tariff-rate quotas doesn’t foresee any additional quota allocations for the bilateral trade between the two in the most sensitive goods. To benefit from preferential tariffs, the EU and the UK exporters will therefore need to use the “erga omnes” quotas, which are accessible by all other countries. The US, Australia and other members of the World Trade Organization fear that thanks to existing close trade links, supply chains and geographic proximity, EU and UK exporters would have overwhelming head starts in the race for the preferential global quotas. The EU and the UK last July proposed hiving off the UK’s portion of the bloc’s tariff-rate quotas on the basis of historical import data, leaving the combined total unchanged. But more than 20 WTO member nations voiced opposition and reserved the right to claim compensation through bilateral negotiations. The EU adopted a regulation that allows it to proceed unilaterally with imposing the quota schedule in the event of a no-deal Brexit. It is understood that the UK will also adopt the agreed schedule, without any adjustments. Meanwhile, the UK government is expected to publish this week a list of tariffs that would apply in case of a no-deal Brexit to all trading partners without preferential agreements.
  • US seeks assurances on scope of antitrust remedies in UK trade deal (MLex): According to the US’ stated ambitions for a post-Brexit trade deal, US companies should be shielded from having to make global changes to resolve UK antitrust probes. The US also wants to ensure fines for companies are based on revenue linked explicitly to the territory of the fining authority. The proposal also builds on a current US drive to harmonize and enshrine basic procedural rights for companies under investigation. The US document specifies that when an authority imposes remedies on a company — such as forcing a change in business practices — for conduct outside of its territory, such remedies should be limited “to situations where there is an appropriate nexus to the Party’s territory.” It also seeks to address concerns that a company involved in illegal conduct around the globe may end up being fined multiple times and see its sanctions calculated according to the same underlying business data.
  • EU rejects no deal citizens rights call (BBC): The EU has rejected calls for an agreement to protect UK and EU expats’ rights, if there is a no-deal Brexit. Tory MP Alberto Costa quit his government job to table an amendment calling for the protections. It was backed by the government in votes on Wednesday, with Mr Costa urging the PM to write to EU chiefs to demand an agreement on rights. However, the European Commission said it would “not negotiate mini deals” as it would imply negotiations had failed.
  • Spain to give 400,000 Britons rights under no-deal Brexit (BBC): Spain’s cabinet has approved measures for Britons in Spain to continue living there as now if the UK leaves the EU without a deal. Foreign Minister Josep Borrell said the main purpose was that no-one, British or Spanish, would be left unprotected. Mr Borrell said the measures “of temporary nature” were aimed at protecting the interests of Spanish and British citizens as well as trade between the two countries. The plan envisages that Britons living in Spain would have to apply for the “foreigner identity card” before 31 December 2020 to prove their legal residency status. Spain’s El Pais newspaper reports that the process would be “nearly automatic” for those UK nationals who already have permanent residency. The plan of Spain’s Socialist Prime Minister Pedro Sánchez would be dependent on the UK reciprocating with similar measures for Spaniards residing in the UK. The decree has measures covering health care, social security, education and many other fields.
  • UK must hold EU polls if Brexit delayed beyond May, says Bundestag (FT): A legal opinion issued by the German Bundestag says Article 50 cannot be extended beyond the end of May unless the UK agrees to hold elections to the European Parliament. EU leaders have generally expressed openness to the idea. “If Britain needs a little more time, we will not refuse them that,” Angela Merkel, the German chancellor, said in Paris this week. The legal opinion says that if the UK refuses to hold the election, the EU Commission could initiate treaty infringement proceedings against London. It says that British citizens could also take the government to court for “violating their subjective rights to exercise their active and passive right to vote”.
  • Government pays Eurotunnel £33 million over Brexit ferry case (BBC): In December, the Department for Transport (DfT) contracted three suppliers to provide additional freight capacity on ferries for lorries. But Eurotunnel said the contracts were handed out in a “secretive” way. As part of the agreement, Eurotunnel has agreed to make some improvements to its terminal. In a statement accompanying the agreement, Transport secretary Mr Grayling said: “While it is disappointing that Eurotunnel chose to take legal action on contracts in place to ensure the smooth supply of vital medicines, I am pleased that this agreement will ensure the Channel Tunnel is ready for a post-Brexit world.” Under the agreement Eurotunnel will make improvements at its terminal in Folkestone, including installing new scanners and changing traffic routing to ease congestion.
  • May sees Brexit as “damage limitation” (BBC): Theresa May’s former chief of staff has told the BBC she always saw Brexit as a “damage limitation exercise”. In his first TV interview, Nick Timothy suggested the PM and other ministers’ attitude meant the government has “not been prepared to take the steps” needed to make the most of Brexit. He also warned the government’s mishandling of it risked “opening up space for a populist right wing party”. He added: “I think one of the reasons we are where we are is that many ministers, and I would include Theresa in this, struggle to see any economic upside to Brexit. They see it as a damage limitation exercise. If you see it in that way then inevitably you’re not going to be prepared to take the steps that would enable you to fully realise the economic opportunities of leaving.”