May Seeks Transition Deal as Part of All-in-One Brexit Package

LONDON (Capital Markets in Africa) – United Kingdom Prime Minister Theresa May wants to bundle talks about the transition period she’s seeking after Brexit into trade negotiations, her spokesman said on Monday. That’s not what businesses want to hear.

“Everybody has always been clear that we are looking to wrap all this up in one single go, everything will be agreed at the same time” May’s spokesman James Slack told reporters. “The point of an implementation period is it’s a bridge to where you’re headed, so you need to know where you’re headed to finalize that implementation period.”

Businesses say they want to know as soon as possible if current trading rules will remain unchanged for two years after Brexit day in March 2019. May pledged as much in September but the proposal hasn’t been discussed in negotiations with Brussels and won’t be until the U.K. improves its offer on the divorce bill. Trade talks are expected to take years to finalize.

European Union leaders said last week that talks on the future relationship — trade and transition — could start as soon as December if there’s progress on the financial settlement. With just 18 months until the deadline and banks already relocating, Chancellor of the Exchequer Philip Hammond describes transition as a “wasting asset:” the longer the delay in securing it, the less it’s worth.

Five business organizations have written to Brexit Secretary David Davis calling for an “urgent” transition deal that keeps rules as close as possible to the way they are now, according to Sky News. May, in her Brexit speech in Florence last month, said she would seek a two-year transition during which rules will remain the same so businesses only have to make one set of changes to adapt to Brexit.

The U.K. government says it’s aiming for an outline deal on the future trading relationship to be in place by March 2019.

Source: Bloomberg Business News