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nego, da se vratimo na picopevce™

 

 

 

UK must pay price for Brexit, says François Hollande

Lack of consequences risks other countries wanting to leave EU ‘to enjoy supposed benefits without downsides’

“There must be a threat, there must be a risk, there must be a price, otherwise we will be in negotiations that will not end well and, inevitably, will have economic and human consequences,” the French president said.

“Britain has decided on a Brexit, I believe even a hard Brexit. Well, we must go all the way with Britain’s will to leave the European Union,” he told a dinner in Paris attended by the EU commission president, Jean-Claude Junker, and the EU’s top Brexit negotiator, Michel Barnier. 

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Hollande has long insisted that Britain would have to live with the consequences of exiting the EU, and there was no chance of any informal negotiations article 50 was triggered to officially leave.

After a week in which London appeared to be gearing up for a clash in talks, Hollande made clear he was more resolved than ever that EU countries must be firm with the UK in order to preserve the cohesion of the bloc and put off other countries seeking to follow Britain’s lead.

Hollande said firmness was absolutely necessary otherwise “the principles of the European Union will be questioned” and “other countries or other parties will be minded to leave the European Union in order to have the supposed benefits and no downsides or rules”.

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He said Delors “had also faced crises provoked by the United Kingdom”, noting that in the 1980s the late British prime minister Margaret Thatcher obtained a rebate on its EU contributions worth billions of pounds every year.

Thatcher “wanted to remain in Europe, but receive a cheque in return”, he said.

“Today, Britain wants to leave, but does not want to pay anything. That is not possible.”

 

mada, pitanje je kako ce to izgledati za dve godine i sa nekim drugim predsednikom. 

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Sve je lepo rekao. I bitno je da se on, Merkelova i Junker oko toga slože i dogovora drže čvrsto. Pa neka makar to bude zaostavština jednog inače užasnog predsednika.

 

Neće novi predsednik odstupati od tog kursa, čak ni ako na to mesto dođe anglofil Filon. Doduše, ne znam šta bi radila ona budala od Sarkozija...

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Cenim da se moze desiti da im Berlin i Pariz kazu - ok, tariff free i bez free movementa, ali nema slobode kretanja kapitala i usluga. I naravno, non-tariff barijere stoje. Cini mi se da je nezamislivo da dobiju bilo sta vise od toga bez koncesija na planu slobodnog kretanje radne snage. 

 

Hague-ov predlog je dobar, i uopste, nije slucajno da svi prethodni premijeri i ministri spoljnih poslova (i ogroman deo osoblja FCO) misle i govore to sto govore. Oni su bolje od bilo koga drugog upuceni u politicku stranu stvari. EU je politicki projekat i ko god to stavlja u zapecak se ili pravi blesav ili se bavi teskom demagogijom ili nema pojma o cemu prica

Edited by MancMellow
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Forget Brussels, Brexit’s toughest battleground is the WTO

WTO’s accession chief says Britain’s departure from the EU creates an unprecedented situation that could take years to resolve.

 

By ALBERTO MUCCISIMON MARKS AND CHRISTIAN OLIVER

10/6/16, 7:53 PM CET

 

 

Negotiating Brexit with 27 occasionally hostile EU states will turn out to be the easy task for the U.K.

 

That will seem like nothing next to the imbroglio Prime Minister Theresa May faces when she sets about crafting Britain’s global trade terms with the more than 160 members of the World Trade Organization.

 

Britain is a member of the WTO under the auspices of the EU, the world’s largest trade bloc. Once the U.K. leaves, it has claimed that it will finally be free to decide for itself the tariffs it slaps on imported steel and lamb, and the levels of subsidies paid to its farmers.

 

But Britain’s freedom to set trade policy — and the EU’s response to that new regime — also will have to conform to the dizzyingly complex architecture of the WTO. Brexit has now become “first and foremost a WTO matter,” said Daniel Guéguen, head of strategy and lobbying at Pact European Affairs.

 

And overall, Britain’s trade terms depend on so many factors outside London’s control that they are impossible to steer from Westminster.

 

“The stakes are so large and the problems so interwoven with each other that the issue, while vital, becomes virtual – almost theoretical. It is like not knowing how to find the end of a ball of wool,” Guéguen observed in his blog.

 

The good news for May is that Britain does not need to reapply to the WTO. Maika Oshikawa, the WTO’s head of accession negotiations, said that Britain would not have to run the gauntlet of a formal application process. “The U.K. is a member in its own right, so it’s not like being kicked out of the WTO,” she said. “This is not a case of applying.”

 

That gift aside, Oshikawa said it was likely that the U.K. would need to forge political consensus among more than 163 WTO members to agree its new “schedule” — the tariffs and subsidies that farmers, manufacturers and service companies would commit to after Brexit. By the time Britain leaves, new entrants such as Bosnia, Sudan and Comoros probably also will have a say in haggling over Britain’s terms.

 

Oshikawa said she could not comment directly on the details of this post-Brexit tussle but did say that the WTO will enter uncharted territory. “It’s going to be a unique case and unprecedented. So if anybody is interested in trade, of course it’s an interesting brainstorming exercise,” she said. “I think diplomacy is an important tool in how to approach this.”

 

Politicians from Britain’s ruling Conservative Party have claimed the process will be straightforward. At the WTO in Geneva last month, Trade Minister Liam Fox stressed that there would be no “legal vacuum” as the U.K. would abide by the same schedule of commitments that it signed up to as an EU member.

 

Guéguen countered that the situation was far from clear cut. “We are preparing to enter a jungle,” he said, adding that the question of agriculture alone raised “a wide range of problems.”

 

Britain’s farmers now benefit from EU subsidies paid under the Common Agricultural Policy. The CAP is frequently criticized by developing countries in Africa and South Asia as one of the world’s most protectionist state support systems, but they are powerless to fight the EU as a bloc at WTO level. A Britain separated from the EU could find itself isolated and hard pressed by countries such as India and Bangladesh to give up paying farmers EU-level subsidies once the Brexit process is complete. 

 

From heifers to tennis balls

 

Negotiations will also have to decide Britain’s continued involvement in broad multilateral trade initiatives, in which the U.K now participates as an EU member. Compounding the confusion are the international quota systems for reduced-tariff products such as beef and poultry imported into the EU. These will need to be renegotiated to agree what share Britain should take. Quota realignment for new members is often a lengthy, agonizing process.

 

If a WTO country objects to another country’s subsidies or other trade-related measures, it can fight them at WTO panels, which can declare the measures illegal. In anticipation Britain has been cautious about the level of state support it will offer farmers and beleaguered steel producers after Brexit. At his speech in Geneva, Fox also promised that Britain would shift to a “more liberalized” trade agenda after originally inheriting the EU’s WTO commitments.

 

Oshikawa said that no country had so far raised Brexit concerns at the WTO but observed that any discussions on new schedules would ultimately need unanimity. “Anything in WTO is total consensus,” she said.

 

One of the biggest challenges for Britain is that it will face the EU’s standard tariffs for goods under WTO rules after it leaves the single market. These meticulously catalog duties on everything from heifers to tennis balls and in several cases, are alarmingly high for British industry, particularly for food and live animals. Cars face 10 percent tariffs, while woolens and textile goods face 12 percent duties.

 

Senior Conservative parliamentarians including Peter Lilley and John Redwood, both advocates of a swift Brexit, have argued that Britain should call the EU’s bluff on tariffs. They argue Britain should keep its tariffs at zero, piling the pressure on the EU to do the same to avoid disruption to valuable trade flows.

 

“The onus would then be on the EU 27 to continue free trade — or take the blame for triggering [WTO] tariffs on their exports to their biggest market,” Lilley, a former trade minister, has argued on the Conservative Home web site. “Continental governments contemplating this would face the wrath of German carmakers and unions, French wine growers, Dutch cut flower-growers et cetera for initiating an unnecessary tariff battle in which they lose more than we do.”

 

The first difficulty with this gambit is reciprocity. One core element of WTO rules is that a country cannot offer favorable tariff terms to another without offering the same regime to all comers. If Britain wants to import French steel for its submarines with zero percent tariffs, it would have to offer the same deal on that product to China and Russia. From the often high trade defenses of the EU, Britain would have to shift seamlessly to being a free-trading Singapore.

The way around this problem would be a free-trade agreement, so both parties could agree to drop trade barriers bilaterally. British officials have said they would consider an arrangement similar to Canada’s accord with the EU as a model. This pact largely eradicates tariffs but offers nothing close to single market membership. It has also been a bruising process. The Canada deal has not been concluded after seven tortuous years of diplomacy, and it will ultimately be hostage to votes in 38 national and regional assemblies, some of which have threatened to veto over the rights of migrant workers.

The chronology is also sensitive here. Lilley has called on the EU not to “prevaricate” over securing a trade deal that would reduce tariffs to zero.

But EU Trade Commissioner Cecilia Malmström has underlined that talks on a trade accord cannot begin until Britain has left and has already dropped onto the WTO regime. Until then, the EU can only agree to trade accords with non-members.

 

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Forget Brussels, Brexit’s toughest battleground is the WTO

WTO’s accession chief says Britain’s departure from the EU creates an unprecedented situation that could take years to resolve.

 

By ALBERTO MUCCISIMON MARKS AND CHRISTIAN OLIVER

10/6/16, 7:53 PM CET

 

 

Negotiating Brexit with 27 occasionally hostile EU states will turn out to be the easy task for the U.K.

 

That will seem like nothing next to the imbroglio Prime Minister Theresa May faces when she sets about crafting Britain’s global trade terms with the more than 160 members of the World Trade Organization.

 

Britain is a member of the WTO under the auspices of the EU, the world’s largest trade bloc. Once the U.K. leaves, it has claimed that it will finally be free to decide for itself the tariffs it slaps on imported steel and lamb, and the levels of subsidies paid to its farmers.

 

But Britain’s freedom to set trade policy — and the EU’s response to that new regime — also will have to conform to the dizzyingly complex architecture of the WTO. Brexit has now become “first and foremost a WTO matter,” said Daniel Guéguen, head of strategy and lobbying at Pact European Affairs.

 

And overall, Britain’s trade terms depend on so many factors outside London’s control that they are impossible to steer from Westminster.

 

“The stakes are so large and the problems so interwoven with each other that the issue, while vital, becomes virtual – almost theoretical. It is like not knowing how to find the end of a ball of wool,” Guéguen observed in his blog.

 

The good news for May is that Britain does not need to reapply to the WTO. Maika Oshikawa, the WTO’s head of accession negotiations, said that Britain would not have to run the gauntlet of a formal application process. “The U.K. is a member in its own right, so it’s not like being kicked out of the WTO,” she said. “This is not a case of applying.”

 

That gift aside, Oshikawa said it was likely that the U.K. would need to forge political consensus among more than 163 WTO members to agree its new “schedule” — the tariffs and subsidies that farmers, manufacturers and service companies would commit to after Brexit. By the time Britain leaves, new entrants such as Bosnia, Sudan and Comoros probably also will have a say in haggling over Britain’s terms.

 

Oshikawa said she could not comment directly on the details of this post-Brexit tussle but did say that the WTO will enter uncharted territory. “It’s going to be a unique case and unprecedented. So if anybody is interested in trade, of course it’s an interesting brainstorming exercise,” she said. “I think diplomacy is an important tool in how to approach this.”

 

Politicians from Britain’s ruling Conservative Party have claimed the process will be straightforward. At the WTO in Geneva last month, Trade Minister Liam Fox stressed that there would be no “legal vacuum” as the U.K. would abide by the same schedule of commitments that it signed up to as an EU member.

 

Guéguen countered that the situation was far from clear cut. “We are preparing to enter a jungle,” he said, adding that the question of agriculture alone raised “a wide range of problems.”

 

Britain’s farmers now benefit from EU subsidies paid under the Common Agricultural Policy. The CAP is frequently criticized by developing countries in Africa and South Asia as one of the world’s most protectionist state support systems, but they are powerless to fight the EU as a bloc at WTO level. A Britain separated from the EU could find itself isolated and hard pressed by countries such as India and Bangladesh to give up paying farmers EU-level subsidies once the Brexit process is complete. 

 

From heifers to tennis balls

 

Negotiations will also have to decide Britain’s continued involvement in broad multilateral trade initiatives, in which the U.K now participates as an EU member. Compounding the confusion are the international quota systems for reduced-tariff products such as beef and poultry imported into the EU. These will need to be renegotiated to agree what share Britain should take. Quota realignment for new members is often a lengthy, agonizing process.

 

If a WTO country objects to another country’s subsidies or other trade-related measures, it can fight them at WTO panels, which can declare the measures illegal. In anticipation Britain has been cautious about the level of state support it will offer farmers and beleaguered steel producers after Brexit. At his speech in Geneva, Fox also promised that Britain would shift to a “more liberalized” trade agenda after originally inheriting the EU’s WTO commitments.

 

Oshikawa said that no country had so far raised Brexit concerns at the WTO but observed that any discussions on new schedules would ultimately need unanimity. “Anything in WTO is total consensus,” she said.

 

One of the biggest challenges for Britain is that it will face the EU’s standard tariffs for goods under WTO rules after it leaves the single market. These meticulously catalog duties on everything from heifers to tennis balls and in several cases, are alarmingly high for British industry, particularly for food and live animals. Cars face 10 percent tariffs, while woolens and textile goods face 12 percent duties.

 

Senior Conservative parliamentarians including Peter Lilley and John Redwood, both advocates of a swift Brexit, have argued that Britain should call the EU’s bluff on tariffs. They argue Britain should keep its tariffs at zero, piling the pressure on the EU to do the same to avoid disruption to valuable trade flows.

 

“The onus would then be on the EU 27 to continue free trade — or take the blame for triggering [WTO] tariffs on their exports to their biggest market,” Lilley, a former trade minister, has argued on the Conservative Home web site. “Continental governments contemplating this would face the wrath of German carmakers and unions, French wine growers, Dutch cut flower-growers et cetera for initiating an unnecessary tariff battle in which they lose more than we do.”

 

The first difficulty with this gambit is reciprocity. One core element of WTO rules is that a country cannot offer favorable tariff terms to another without offering the same regime to all comers. If Britain wants to import French steel for its submarines with zero percent tariffs, it would have to offer the same deal on that product to China and Russia. From the often high trade defenses of the EU, Britain would have to shift seamlessly to being a free-trading Singapore.

The way around this problem would be a free-trade agreement, so both parties could agree to drop trade barriers bilaterally. British officials have said they would consider an arrangement similar to Canada’s accord with the EU as a model. This pact largely eradicates tariffs but offers nothing close to single market membership. It has also been a bruising process. The Canada deal has not been concluded after seven tortuous years of diplomacy, and it will ultimately be hostage to votes in 38 national and regional assemblies, some of which have threatened to veto over the rights of migrant workers.

The chronology is also sensitive here. Lilley has called on the EU not to “prevaricate” over securing a trade deal that would reduce tariffs to zero.

But EU Trade Commissioner Cecilia Malmström has underlined that talks on a trade accord cannot begin until Britain has left and has already dropped onto the WTO regime. Until then, the EU can only agree to trade accords with non-members.

 

 

 

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Why Europe wants a hard Brexit to hurt

Charles Grant

 

British ministers are being overly optimistic about the chances of a decent trade deal if they reject the single market

 

Friday 7 October 2016 07.00 BST Last modified on Friday 7 October 2016 08.20 BST

 

 

 

Britain’s European partners are uniting around a very tough position on the forthcoming Brexit negotiations. At the same time, Theresa May is starting to rule out options that could leave Britain closely integrated with the continental economies. Both her government and the 27 are being driven by politics rather than economic self-interest. This will harm trade and investment and therefore leave Britain poorer.

 

May has announced that she will invoke the article 50 exit procedure before the end of March, while also rejecting the jurisdiction of the European court of justice. Together with her promise to restrict the right of EU citizens to work in Britain, this precludes staying in the single market with which Britain does almost half its trade.

 

This means the UK will have to negotiate access to the single market, sector by sector, through a free trade agreement (FTA). British manufacturers may not suffer too much, since FTAs (such as the recent EU-Canada deal) eliminate tariffs on goods, although the UK’s likely decision to also leave the EU customs union will create hassle on borders for importers and exporters. The problem with such an agreement is that it would do little to open up markets in services such as finance, construction or aviation. That would require the removal of regulatory barriers – which is what the European single market is all about.

 

The British economy is about 80% services. The glummest faces that I saw at the Conservative conference in Birmingham were those of the bankers. They noted that ministers failed to speak out on the importance of their sector. They are becoming resigned to losing “passporting” – the rule that allows a UK-regulated firm to do business across the EU – and are preparing to shift operations out of London. Some bankers reckon that this exodus will deprive the Treasury of about £10bn in taxes a year.

 

British officials hope to win a much better deal than the Canadians; after all, Britain has a bigger economy and the 27 would benefit from it thriving. They expect a “Canada-plus” FTA, covering some services as well as goods. That may be possible. The problem, however, is that the 27 other governments are forging a very hard line on Brexit.

 

Article 50 was written to put a country leaving the EU at a disadvantage. Once a government activates the article, it has just two years to negotiate the exit settlement. The two years may be extended by unanimity, but most of the 27 want Britain out before the June 2019 European elections and the conclusion of the next round of EU budget negotiations at about the same time. A separate negotiation will be needed for the future economic relationship, in the form of an FTA, but that could take five years or longer to complete and would then need ratification in each of the national parliaments (and there are, confusingly, 45 in the EU). So the UK will need an interim deal to provide cover in the years between leaving the EU and the entry into force of the FTA.

 

But the clock will be ticking during the negotiation of the divorce settlement and the interim deal. And if the talks break down without agreement, the UK will be on its own with only World Trade Organisation rules – which would mean 10% tariffs on UK exports of cars and more than 50% on some meats, and provide no access for services.

 

Because the cards are stacked against the UK, the prime minister has asked for “pre-negotiations” before invoking article 50: she wants to know what her partners might give her, including in an interim deal. But the 27 are refusing informal talks lest clever British diplomacy undermines their unity.

 

On recent visits to Berlin, Paris and Brussels, I was struck by the uncompromising line on the “indivisibility” of the four freedoms – of labour, capital, goods and services. Key policy-makers say the UK cannot be allowed the benefits of membership, such as participation in the single market, without accepting the responsibilities, such as budget payments and free movement (Switzerland and Norway accept both).

 

British negotiators need to understand why the 27 are so obdurate on this point. The Germans and others worry that if the British win a special status, other countries – inside or outside the EU – would ask for equivalent deals. And that would potentially destabilise the union.

 

But the biggest driver of the tough line on the four freedoms is fear of populism. In Paris, mainstream politicians do not want Marine Le Pen to be able to say: “Look at the Brits, they are doing fine outside the EU, let’s follow them there.” Similar views colour thinking in The Hague, Rome and other capitals: the British must be seen to pay a price for leaving.

 

The British need to worry about the European parliament, with which they have long had antagonistic relations, and which believes in the mantra of the four freedoms. It must approve both the article 50 agreement and the FTA. If by some feat of brilliant diplomacy, Britain were to win a deal combining single-market membership with limits on free movement, MEPs would throw it out.

 

Many Brexiters claim that the toughness of the 27 is merely an opening stance, and that, when talks commence, economic self-interest will push them to soften. But that may be wishful thinking. One top German official told me that a bad deal for Britain would divert investments to Germany and thus benefit his country.

 

And although German industrialists would like to see Britain closely integrated with the European economies, Theresa May should not assume that they drive German policy. They have spent the past two years lobbying against EU sanctions on Russia, without any impact. In any case, an FTA between the EU and the UK, removing tariffs on goods, would suit German industry. It would not be so good for the service-dependent UK economy.

 

Many Conservatives hope that in the end Angela Merkel will look after the UK. It is true that she is likely to remain chancellor after next September’s general election. And she certainly regrets Brexit and wishes Britain well. But her main responsibility, as the EU’s unofficial leader, is to keep the 27 together, and that means working closely with the French to do so. For Merkel, the interests of the EU come first. She believes that maintaining the institutional integrity of the EU, and the link between the four freedoms, is in Europe’s and therefore Germany’s interest.

 

One reason that British politicians are over-optimistic about the kind of deal they can achieve is their misreading of continental debates on migration. They tend to assume that because the British dislike EU migration, other Europeans must think similarly. Therefore, they argue, the 27 will soon come round to Britain’s viewpoint and want to limit free movement.

 

However, in most EU countries the big issue is inflows of people from outside, not inside the EU. In Germany, for example, mainstream politicians do not see intra-EU migration as a big problem. So the 27 are not going to allow the British to combine single-market membership with controls on EU migration.

 

Because article 50 puts the British government in a weak position, it cannot hope for a half-decent deal without a lot of goodwill from EU partners. If British ministers thump the table and issue threats, they will lose goodwill. The anti-immigrant tone of the Conservative party conference will have done nothing to enhance the UK’s reputation.

 


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