Home U.K. Brexit stitch-up: Economist warns Brussels to keep influence on UK trade after...

Brexit stitch-up: Economist warns Brussels to keep influence on UK trade after withdrawal

The BNY Mellon Investment Management chief economist said Brexit trade talks with the European Union could ultimately influence British trade agreements with other countries. Mr Dhar said the expectation is for negotiations on the future relationship with Brussels will take “priority and precedence” over other potential deals once the UK leaves the bloc in January. But the new agreement in place with the EU could ultimately shape the trade arrangements the UK will adopt with other countries.

Speaking to Bloomberg, the economist said: “The EU talks will take priority and precedence and therefore the kinds of agreements we’ve made with the EU will affect the negotiations with other countries.

“To me, it looks like the initial position will be to head for what we might call a skinny deal with the EU based on good and, maybe, certain sectors in particular which could leave a fair amount of flexibility to make deal with other countries.”

Mr Dhar continued: “I think the UK factors the EU negotiations will take priority but that is not to say there will not be a lot of effort expended on getting trade deals with other countries up and running as soon as possible.

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“There are other countries, predominantly the US but also we’ll be looking at Australia, we’ll be looking at Japan. We might look at something like the TPP, the Trans-Pacific Partnership.

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Boris Johnson was warned the trade deal he strikes with the EU could influence others (Image: NUMBER 10•UTT)

Dhar said EU trade talks will take “priority and precedence” over new deals (Image: BLOOMBERG)

“All of those tracks will be gearing up during 2020. Having said that, most of the resources will be going into negotiating with the EU.”

Boris Johnson is expected to deliver on his pledge to see Britain leave the EU on January 31 after he secured an overwhelming majority in the Commons in the elections earlier this month.

Last week, MPs rushed the Withdrawal Agreement Bill (WAB) through the first and second reading phase of the legislative process and the WAB is expected to fully clear Parliament in mid-January after scrutiny in the Lords.

The European Parliament is also expected to hold a vote on the proposed withdrawal agreement sometime in January. Should both Parliaments agree on the agreement, the UK will officially leave the bloc on January 31 and talks will move on to discuss the future trade arrangements between Britain and the EU.

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Boris Johnson insisted a trade deal with the EU will be in place by December 2020 (Image: NUMBER 10)

During the state opening of Parliament last week, the Prime Minister reiterated his belief that the Brexit transition period will not be extended beyond December 31, 2020 – meaning that a trade deal has to be agreed with the EU within this time frame.

But David Tinline, a former senior adviser to WTO chief Roberto Azevêdo, has warned the Prime Minister has weakened his negotiating hand by imposing the 11-month time limit.

Mr Tinline told Politico: “If you’re going to set a hard time limit you’re going to reduce the level of ambition to the point where it’s been described as a ‘bare bones’ agreement.”

The trade expert also warned the Prime Minister against leaving the EU on World Trade terms if no free-trade agreement is struck with Brussels by the end of December 2020.

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The Withdrawal Agreement Bill is expected to clear Parliament by mid-January and be in place for Britain’s withdrawal in on the 31st (Image: EXPRESS.CO.UK)

He said: “It’s a concern because it’s a dramatic raising of barriers between the UK and its biggest trading partner. That’s essentially a hard Brexit.”

But a new survey of almost 1,000 British company directors showed business confidence in the UK economy has soared to its highest level for more than three years.

Mr Johnson’s thumping election win has put a halt to the economic uncertainty caused by Brexit and provided businesses, investors and financial markets some much-needed clarity.

The study conducted by the Institute of Directors (IoD) found confidence in the economic outlook had swung 39 percent points, from the red into the green, between November and December.

The confidence indicator, which measures the net balance between firms that are optimistic against those who are pessimistic, had been languishing in the negatives since the spring of 2018.

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