Still far from Brexit

Above all else the chemical industry and business in general seeks certainty over Brexit so that it can plan for the future. But the next few weeks – following the publication this week of a draft deal – are likely to see more uncertainty until it is finally agreed or thrown out.

If it is voted out, the UK could exit the EU with just WTO rules and tariffs in place on 29 March 2019, a prospect few in industry would relish. If the country gets a second referendum on Brexit instead, the uncertainty will continue.

The deal struck by UK prime minister, Theresa May, faces enormous challenges as it makes its way through parliament to a final vote on acceptance or rejection. Publication of the draft agreement has already prompted a spate of resignations by government figures, including several cabinet ministers. The agreement, approved by government ministers at a five-hour cabinet meeting late on Wednesday, faces fierce opposition from within her ruling Conservatives as well as opposition parties.

On Thursday morning Dominic Raab, the Brexit Minister, quit his government position as did four other government officials. There is also the possibility of a vote of no confidence in the Prime Minister over the coming days which could force her resignation.

DEAL DETAILS

The draft Brexit agreement includes a temporary UK-wide customs agreement which will be terminated if and when a new free trade agreement is signed between the EU and UK. This will allow frictionless trade to continue between the Republic of Ireland and Northern Ireland – a key sticking point in the negotiations.

The EU and UK will “use their best endeavours”, the two parties said in the draft Brexit text, to have a trade agreement in place by July 2020, six months before the end of an official transition period in December 2020. If not then the temporary customs union can be extended indefinitely. But if either side wishes to exit the customs agreement it can only do so through the agreement of a joint EU/UK committee.

European president, Donald Tusk, said that ambassadors from the remaining EU27 will meet by the end of the week to give their assessment of the draft agreement. On 25 November, a European Council meeting will take place to formally approve the agreement.

He added: “Since the very beginning, we have had no doubt that Brexit is a lose-lose situation, and that our negotiations are only about damage control.”

Trade groups the UK’s Chemical Industries Association and Europe’s Cefic issued a joint press release on 15 November welcoming the agreed text.

They said that ensuring continued participation in Reach through the European Chemicals Agency is the best outcome for the chemical industry in both the UK and the Europe as well as for the health and environment agenda across the continent.

Marco Mensink, Cefic’s Director General : “Our position remains unchanged – the industry needs regulatory certainty on the arrangements between the EU and the UK for the period after March 29 and the sooner these arrangements are agreed on, the better the industry can prepare and the less disruption it will cause for trade”.

CIA director general, Steve Elliott, said “We will continue to work with MPs and members of the House of Lords to ensure there is a UK-EU deal for our country to leave the European Union and trade with member states in the future with minimum disruption to the chemical sector”.

WARNING ON RECESSION

Meanwhile, Ready for Brexit chairman Paul Hodgessaid he believes a recession is already on the horizon for the global economy. This would be made worse by uncertainty over Brexit and high levels of debt leading to the prospect of commercial and state bankruptcies.

He added: “We have been told by a number of MPs that whatever option for Brexit comes up there is no majority for it.”