Transcripts For BBCNEWS Newsnight 20171211 : vimarsana.com

Transcripts For BBCNEWS Newsnight 20171211

May i first of all, congratulate the Prime Minister on her triumph last friday. Here, here. Can ijoin my right honourable and learned friend in congratulating my right honourable friend in driving through an improved agreement on friday against what many thought could not have been feasible. Today really was an illustration about old Harold Wilson cliche that a week is a long time in politics. So how did theresa may go from humiliation in brussels to widespread praise on her own benches . Well, the vast majority of tory mps want to give her space ahead of the eu summit in brussels this week. I am also told that the crucial change in mood came over the weekend when downing street offered assurances to euro sceptics on one of their main concerns from last weeks deal with the eu this was that the offer on Northern Ireland could be used to smuggle the uk back into the Single Market. They were told this was not possible for one very simple reason if the uk crashes out of the eu, with no deal at all, then the specific commitments on the irish border will no longer apply. The text of this agreement now makes clear that in the event a deal Northern Ireland will not be separated politically, economically or by any regulatory requirements from the rest of the uk, along with the aim of no hard border on the island of ireland. Of a deal. In the event of no deal, no overall deal, nothing is agreed. In dublin, there was weary acceptance. The reality is that at any point in this process, events could very well intervened and could, you know, make the agreement politically impossible to deliver on. Intervene. I think thats the big risk with all of this. You know, genuinely, all parties entered into an agreement that is considered to be absolutely, you know, iron clad, but in reality, political events in these Uncertain Times mean that nothing is really cast iron. It cant be. This weeks mid winter chill shows no signs of letting up. But theresa may is benefitting from a thaw in relations within her own party, until the next brexit challenge arises. Nick is here. Nick, this point that she managed to pacify this year on the part of the brexiteers that ireland was going to put us into the Single Market by the back door, what argument did she actually use . There was this hiccup yesterday when david davis said that offer on the border with a statement of intent, he said that was much more than a legally enforceable thing. Dublin took fright at that. David davis went on lbc today saying, yes, of course, i was saying its a statement of intent and thats much bigger than the law because were good friends. He said, of course its legally enforceable. But crucially legally enforceable within the withdrawal agreement, article 50. What that means, we were saying last week, is that the offer of full Regulatory Compliance with the uk with those elements related to the Northern Ireland Irish Republic border, that third element is covered. Within article 50 that is. If theres absolutely no deal, if we crash out with no deal all bets are off. Those arrangements do not apply. At that point, are you down to a bilateral undertaking between the uk and the Irish Republic. We start again on that one. Ok, thats phase one. Storm over, everythings calm. That means we look forward to phase two. The whole thing moves on now. We have the European Council this thursday and friday and we have, so far, the draft summit conclusions. That looks forward in two areas first on transition. The council suggests the uk says it wants to be for two years and the whole body of eu law would apply for two years. The uk view is that it should be an implementation period. Yes, that body of law would apply from the beginning, but eventually you move away from it and the beginnings of the hints of the restrictions that the uk will seek to apply to the uk for the future trade arrangements because the uk has decided to leave the Customs Union and the Single Market. The council is the big thing this week. Thanks a lot. Well, lets assume the big European Council meeting this week goes well, that we move on to phase two of the talks. It cant be stressed enough that this is the issue which will define 2018. So far, the British Government has held its different factions together, by them all adhering to the goal of building a deep and special partnership a bespoke deal specially for britain. Not hard, not soft. Something different. It was set out in the florence speech by theresa may. Let us not seek merely to adopt a model already enjoyed by other countries instead, let us be creative as well as practical, in designing an ambitious Economic Partnership that respects the freedoms and principles of the eu and the wishes of the british people. Everyone in the uk government can sign up to that. But, if you listen carefully to what the eu says, they think its more binary. For our partners there, the basic choice is you are either inside the eu Single Market, like norway. Or you are just a so called third country like canada. You can have a trade deal, like canada, but thats a long way from where we are. Those two existing models keep coming up phrases from michel barnier, on the Single Market, such as, either youre in or youre out. Or, its integrity is non negotiable, have been making this point. Or this translation it will not be possible to combine the benefits of the norway model with the weak constraints of the canada model. Well, lets for a moment, imagine the eu means that. What do these two options imply . You can think of them as two ends of a spectrum in which you choose access to the eu market, or automony to set your own rules and regulations. Norway has lots of access to the eu market, but the condition for that is compliance with eu rules, including Free Movement. And paying in to the eu budget. For these reasons, brexiteers and our government have ruled it out. It would mean paying the European Union billions of pounds every year in perpetuity. It would mean following eu rules with no say over them. It would mean no divergence from eu rules in the future whatsoever. It would mean zero control of immigration. I have to say to the right honourable gentleman that wouldnt make a success of brexit, that would be no brexit at all. Ok, if you dont like that, what about the canada option . Now here is the canada deal with the eu ceta it is called. The eu canada comprehensive economic and trade agreement. It has quite a bit of detail. If you look, for example, i take a page 155, article 20. 12, this is about parties may make laws against camcording of movies in cinemas. Thats the kind of detail it has. Because it has so much detail, no one thinks you can negotiate one like this in a year, but you could kind of take this as the template, tipex the word canada out, and replace it with the word uk. The advantage is wed have more autonomy. This is the full english proper brexit. But on access to the eu market, its not great for some of our key industries. And there is fact that you may still need a physical border and weve pledged not to have one in ireland. This norway vs canada choice is how the eu want us to look at this they say we simply have to decide. But is itjust possible we can get Something Better . That is what the government wants. Heres how david davis described the trade deal the government is after. An overarching free trade deal, but including services, which canada doesnt. With individual, specific arrangements for aviation, for nuclear, for data, a series of strands which weve worked out. Most of them based on where we start now. If the basic deal, im being crude about this, is canada plus the city or Something Like that . Canada plus, plus, plus. We want a bespoke outcome. We will probably start with the best of canada and the best of japan and the best of the japan and south korea and then add the services. He wants more trade than the canadians have got but does he want to align with eu rules to get it . And will the eu listen . Certainly they have offered special deals to other countries when they want to. To ukraine, for example. And to liechtenstein. With me now are two experts on all this. Charles grant, director of the centre for european reform. And allie renison, head of europe and trade policy at the institute of directors. Which sectors, british sectors, if we went straight to the canada deal, which british sectors would really suffer from that . I think when you look across the piece, the point about canada is that its effectively starting from a very different vantage point. The Market Access is nowhere near. They still have tariffs. Theyre not eliminated. Agriculture would be particularly hit. Financial services and services, professional Services Sectors whereby you would have under the canadian deal, have a local office in a European Capital to access those markets. In access terms, i thought the goods makers, on the goods, i thought that was mostly sorted out on that, it was just the services that were a hold. The difference is if you are in the automotive sector you tend to rely on your ability, the Vehicle Certificate Agency can issue approval for a car to be sold an marketed throughout the entirety of the eu. They have an agreement on what we call conformity assessment. You dont have that. Thats the differentiator between canada and norway, youre not automatically downloading eu rules. But its not acknowledged that their things are compliant either. In terms of a border, whats the system . I mean the canadians have borders presumably, its just more or less like it is at the moment . When goods leave canada and come into the eu, they have to go through the customs controls on the edge of the Customs Union, yes. So, it doesnt help you at all on that. A lot of people are saying the canada option will allow us to remove the physical border in ireland . No, thats not right at all. There is a border between canada and the us, although theyre both in nafta, have a free trade agreement, they have border controls. Thats the gist of the difference. Canada plus, plus, plus. What would be the plus, plus, plus . I think even though were not talking about completely replicated passporting for financial services, it is something along those lines. Very off the anyone trade agreements between Different Countries they dont tend to include anything substantial on financial services. You dont tend to have agriculture for example, included. In the norway option the eea doesnt really cover agriculture. Thats something thats going to be critical to the irish border. This is going to be different. Charles, can we, do you think they will offer us something in the middle . They keep saying its norway or canada. They say its norway or canada. The british will probably ask for something that is neither. We would almost be in the Single Market. Wed be aligned with eu rules. If we changed our rules, wed allow us to punish us a bit. Barnier will say no to that. I think we will get canada plus, which means canada as you describe, with services added in, not Single Market, but some access in aviation, financial services, data flows, we will have to pay a price. That will be taking the rules from the eu, paying money into the budget and taking Something Like the court ofjustice to tell us what to do. Do you agree with that . When you look at what the swiss model, is i think there is some wriggle room. The swiss arent formal members of the Single Market, but they have pretty good access in terms of goods. What were talking about to achieve that bespoke option is deep, unprecedented cooperation between the uk and eu. It is right to say you can have your autonomy or your access, as far as you take a bit more of one, but you lose another. We can have canada plus if we pay a price for it. Lets turn to the politicians. With me in the studio is the former tory mp, peter lilley, conservative brexiteer and a former president of the board of trade. He knows his way around these negotiations. And from westminster, labours chuka umunna, who is chair of the all Party Parliamentary group on eu relations, and would really like us to remain within both the Single Market and the Customs Union. Good evening to you both. Peter lilley, you would prefer canada plus plus to canada plus . I would prefer as few barriers as possible. It is in our interest, it is in europes interest. I dont think we will get maximum, optimum, because the European Union has made it clear they want us to appear at least to be worse off than we are at present. I find it difficult because actually are exporters have got a 15 advantage because of the exchange rate. They will have to pay 4 tariff if there is no deal at all. 15 outweighs 4 for most. You would prefer canada to nothing, but you would prefer canada plus. But you dont think they will give it to us. The British Government position is they will give it to us. Maybe they know something i dont know. I merely listen to the European Union and take the at their word. We should be prepared for the probability that they want get nearly as much as they are seeking, and that quite possibly will end up trading on wto terms, which is a good second best. Chuka umunna, how much of a disaster, do you think, canada would be . If we went something straight if you went straight to Something Like canada. How bad would that be from your perspective . I think it would be pretty disastrous. It may be appropriate for a canada, but we are the sixth biggest economy in the world and they are our biggest trading partner. My preference would be the norway option. A fully to leave the European Union, which means we are we stay in the Single Market of the least. I would like to stay in the Customs Union as well. But the government has chosen to do away with that, which is the best option. The problem with canada, first of all it took a long time to negotiate, up to seven years. Secondly, it doesnt Cover Services really. That is 80 of our economy. Thirdly, potentially you could have Foreign Investors and large multinationals suing the British Government if they felt we were not opening up the public sector, the nhs in particular, to further marketisation. And i dont think any that is particularly attractive to the british people. Its just not appropriate. And us having an fta canada style fta. Sorry, free trade agreement. That would preclude us from staying in the Customs Union. One of the parts of the agreement that was reached on friday was that we should have a backstop position of being able to observe Customs Union and Single Market rules as a solution to the Northern Irish border. You said so much. Can ijust knock on the head of this idea that because the canadian agreement took eight years to negotiate, it would take a long time for us to negotiate something similar. The canadians had ten different 10,000 different tariff lines. The eu have 15,000. They have to decide how rapidly they can be traded off against each other. They start off with 20,000 specifications for goods and services. They had to decide which to align. We start with zero tariffs. We want to end up with zero tariffs. Ten minutes. All we have to negotiate is a diversion is mechanism. Chuka umunna, do you think there is any possibility of a norway option that would allow any restriction are any kind of change to the Free Movement rules . Because that in many respects is seen as the true red line of the british voters. That is where your norway option forms. They wont give you norway but without Free Movement. Lets not forget Free Movement is a bit of a misleading phrase. It suggests that its unconditional. Free movement is conditional. There are things we can do within the existing Free Movement framework to better restrict immigration. So, for example, the belgians require people to register when they come to their country. They have been there for more than three months. We dont require people to do that. We could require people, if they have been here for three months, havent been able to get work and dont have the prospect of work, we can require them to leave but we dont do that. Lichtenstein, which as the norway option, as it were, it is part of the European Free trade association, they actually have called has applied to the numbers of eu immigrants they have come to their country. You can restrict it, yes. Charles grant, do you think there is a possibility, if we are confronted with the stark choice, that they would say, you can have a norway option but with a little bit of concession on Free Movement . One can fiddle with the margins of these details but the broad principle is we would have to accept Free Movement. Eu believes these are insoluble in

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