There will have to be compromises by both sides over Brexit – and the UK is looking for a “unique and unprecedented partnership” with the European Union.
That was the message from British prime minister Theresa May in a long-awaited speech in London on Friday.
But she warned the UK had every right to “cherry pick” what it wanted to sign up to, saying that was the basis of any free trade agreement.
She talked tough, saying “we will not accept the rights of Canada and the obligations of Norway”.
The speech managed to satisfy both Brexiteers and Remainers in her Cabinet after months of wrangling and division over the right approach, allowing her to recover some of the standing she had gained at the end of the successful ‘divorce bill’ negotiations in December.
However, even EU chief negotiator Michel Barnier – who has come under fire for threatening to ground British aircraft if the UK failed to toe the line during the post-Brexit transition phase – praised May’s speech.
Welcome from Barnier
“I welcome PM Theresa May’s speech,” he tweeted. “Clarity about UK leaving Single Market and Customs Union & recognition of trade-offs will inform EU guidelines re future FTA [free trade agreement].”
Some European politicians were more sceptical, with Manfred Weber, a key ally of German Chancellor Angela Merkel, saying: “I don't see how we could reach an agreement on Brexit if the UK government continues to bury its head in the sand like this.”
Overall, however – and especially at home – the message was well received, although sterling did drop below the €1.12 mark even before the PM started her speech, and continued to fall to €1.1175 before staging a recovery.
By 12.30pm (GMT) today, the pound had bounced back to €1.1236 as markets digested the overall positive response to her comments.
The FTSE 100 of leading companies, which had been losing ground all week, saw little change, ending the day at around 7,082, although it staged a mini recovery this morning, reaching 7,099 at 11am before falling back slightly.
The FTSE 250 also saw little change on the day, and was also down on the week, but has shown a strong recovery this morning from 19,386 at open to 19,501 at 2pm.
What did May promise?
So just what did May promise? On that all important trade deal, she defended the UK’s right to “cherry pick” – a favoured phrase of EU negotiatiors.
She pointed existing EU agreements with non-EU countries were not uniform.
“The EU’s agreement with Ukraine sees it align with the EU in some areas but not others,” she said. “The EU’s agreement with South Korea contains provisions to recognise each others’ approvals for new car models, whereas their agreement with Canada does not.”
May said the EU itself was “rightly taking a tailored approach in what it is seeking with the UK”. She said the EU had been clear that no precedents exist for the sort of access it wants from the UK on fisheries – with (other) EU countries currently taking 70% of the total quota for UK waters, and concerns this could plummet when the UK takes back full control.
“The fact is that every Free Trade Agreement has varying market access depending on the respective interests of the countries involved. If this is cherry-picking, then every trade arrangement is cherry-picking,” she said.
“What would be cherry-picking would be if we were to seek a deal where our rights and obligations were not held in balance.”
She added: “I think it is pragmatic common sense that we should work together to deliver the best outcome for both sides.”
European Court of Justice
The prime minister managed to make a concession to the EU on the European Court of Justice (ECJ) that didn’t alienate hard-line Brexiteers.