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UK trade responds as EU27 approves negotiating guidelines for next phase of Brexit and transition deal

Published:  23 March, 2018

On Friday in Brussels EU leaders finally agreed to adopt negotiating guidelines for the future of EU-UK relations, paving the way for the next phase of talks to get underway, after months of wrangling over the details.

The second phase of the negotiations will now allow politicians and bureaucrats to bring more focus on the nature of the UKs trading relationship with its (former) European partners after the 21-month transition period comes to an end at the close of 2020.

UK trade bodies, including the Wine and Spirit Trade Association (WSTA) and Scotch Whisky Association (SWA) have been quick off the blocks in outlining their positions going ahead, welcoming the gathering momentum, while spelling out the necessity of getting a good deal for the drinks trade.

“The agreement to a draft legal text has demonstrated goodwill on both sides and is a decisive step towards providing the certainty that businesses in the wine and spirit sector crave,” said WSTA chief executive Miles Beale in a statement today.

“We also welcome the agreement of the EU27 to negotiating guidelines on the UK’s future relationship with the EU. Since October 2016 the WSTA has argued in favour of continued tariff and quota free access to and from the EU’s single market - which the text rightly aims to deliver.”

Business will be relieved by what looks like being a continuity of current trading arrangements with the EU, allowing for one all encompassing change of rules at the end of the agreed transition period, rather than a two-stroke shift at both beginning and end of that period.

However, Beale added: “It is imperative that politicians do not stop here … as the UK is being constantly reminded, nothing is agreed until everything is agreed. This means that politicians on both sides of the Channel must, as a matter of urgency, find a mutually acceptable solution for the island of Ireland and agree detailed, practical customs arrangements on which the movement of goods to and from the rest of the EU rely.”

Without this, reminded Beale, businesses were still unable to plan for the future effectively with regard to the cost and complexity of transporting goods between the UK and EU.

The SWA, meanwhile has set out its priorities for the Scotch Whisky industry, arguing that the transition period should not be set in stone, but allowed to run until necessary to protect the best interests of an export sector worth £4.36 billion annually.

“The transition period should last as long as is necessary to ensure a smooth Brexit for businesses and citizens in the UK and Europe,” said SWA Chief Executive Karen Betts.

“Businesses should not have to make systems changes twice, and every effort should be made to avoid disruption to trade at the end of the transition period. December 2020 is a very tight timeline and this should be reviewed if necessary.

Betts, however, described the agreement today as providing “welcome reassurance about the rules and export procedures we will need to comply with after March 2019.”

The WSTA has been pushing for an agreement between the EU and UK for as free as possible a trade agreement, with no or low barriers to trade, based on tariff and quota free access - a position on which both Theresa May’s government and EU leaders appear to be coming into closer alignment as the possibility of a hard Brexit currently looks to be receding.

Whether this remains the case, only the months ahead of intense negotiating will reveal. For the moment, though, it looks to be business as usual – with the caveat of a depressed currency and potential issues with retaining EU workers – until the end of 2020.