May to say UK intends to sign trade deals in Brexit transition period

Theresa May will tell MPs today that the UK intends to negotiate and sign new trade deals during a transition period after it leaves the European Union in March 2019.

In a statement to the House of Commons on last week’s EU summit, the prime minister will make it clear that although Britain will leave the single market and customs union, it will abide by EU rules during the transition.

“We would propose that our access to one another’s markets would continue as now while we prepare and implement the new processes and new systems that will underpin our future partnership,” she will say.

During this period the UK “will prepare for our future independent trade policy by negotiating – and where possible signing – trade deals with third countries, which could come into force after the conclusion of the implementation period.”

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Ms May also intends to use the transition period to register "new arrivals from the EU" as preparation for a future immigration system. She will today meet senior ministers on the Brexit cabinet sub-committee to discuss what the UK should seek in negotiations.

The full cabinet will meet tomorrow for its first discussion of the end-state the UK is hoping for in the negotiations.

On display

Divisions among Conservatives were on display over the weekend when Brexiteer backbenchers criticised chancellor Philip Hammond’s views about the transition period.

During a visit to China, Mr Hammond said he would expect the transition to replicate the status quo, with Britain continuing to accept EU rules, free movement of people and the jurisdiction of the European Court of Justice (ECJ).

“We won’t technically or legally be in the customs union or in the single market, but we’re committed as a result of the agreement we’ve made this week to creating an environment which will effectively replicate the current status quo so that businesses can carry on trading with their commercial partners across the EU as they do now.”

Eurosceptic MP Jacob Rees-Mogg said the UK would be reduced to the status of a colony if it accepted new EU rules it had no part in determining.

No choice

Senior British officials acknowledge privately that the UK will have no choice but to accept all new rules governing the single market during a transition, along with the jurisdiction of the ECJ.

Foreign secretary Boris Johnson said yesterday that the UK would have to embrace regulatory divergence from the EU if it was to exploit Brexit's economic opportunities, and he suggested that trade could remain frictionless without regulatory alignment.

"What we need to do is something new and ambitious, which allows zero tariffs and frictionless trade but still gives us that important freedom to decide our own regulatory framework, our own laws and do things in a distinctive way in the future," he told the Sunday Times.

The cabinet is perceived to be divided between those, like Mr Johnson, who want Britain to set its own regulatory course after Brexit, and others like the chancellor who favour remaining in close alignment with the EU.