Nissan decision to stay in Britain came with clear signal that No 10 is aiming for a free trade relationship similar to single market

Brexit weekly briefing: is the plan for leaving the EU softer than we thought?

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The big picture

In the end, we learned more about the government’s preferred Brexit plan from the business secretary in a 10-minute television interview than we have in four months from the prime minister and her three cabinet Brexiters.

Appearing on the BBC’s Andrew Marr Show, Greg Clark was pushed on just what the government had promised Nissan to persuade the carmaker – as it announced last week – to swallow its Brexit fears and produce its next two models in Britain.

Facebook Twitter Pinterest A member of Nissan’s manufacturing staff working on the production line of the Qashqai in Sunderland. Photograph: Oli Scarff/AFP/Getty Images

The decision was clearly a huge boost to the government, guaranteeing some 7,000 jobs in Sunderland and allowing Theresa May to hail a vote of confidence in post-Brexit Britain. But what had induced Nissan to stay?



Breaking with the PM’s edict of not providing a running commentary, Clark delivered a clear signal that No 10 is aiming for a free trade relationship with the EU similar to the single market and customs union:

What I said was that our objective would be to ensure that we would have continued access to the markets in Europe – and vice versa – without tariffs and without bureaucratic impediments and that is how we will approach those negotiations.

As our colleague Patrick Wintour noted, Clark’s clear implication was that Britain’s target will be not just to avoid tariff and non-tariff barriers with the EU for carmakers but probably to seek similar deals for other industries in a sector-by-sector approach.

The first point about this is that when it comes to the negotiations, part of the government plainly sees access to the EU single market as at least as important as migration controls and ending oversight from the European court of justice. That appears to be at odds with May’s stated priorities.

The second is that the logical inference from Clark’s remarks is that he believes Britain should stay in the customs union – which is not necessarily the view of Liam Fox at the Department for International Trade.

The third is that it is by no means clear – some would say highly unlikely – that the EU will be open to such sector-by-sector negotiations.

And the final point is the potential cost of such an approach, not just in contributions to the EU budget but – as Nick Clegg pointed out – in the “colossal amounts” the taxpayer could end up paying to subsidise a whole series of such deals for different industry sectors.

It does all, though, suggest that May’s views on the desirability of remaining in – or as good as in – the single market might be closer to the ones she revealed privately to Goldman Sachs bankers before the referendum than to those she trumpeted at the Conservative party conference.

The prime minister’s preferred Brexit may be softer than anyone thought – which could mean trouble ahead from the Brexiters.

The view from Europe

The big news from Brussels last week was that after a fortnight of valiant last-gasp resistance from the French-speaking Belgian region of Wallonia, the EU and Canada finally got to sign their free trade deal, known as Ceta.

The package, which gives the EU its first trade pact with a G7 economy, still has to go before national parliaments, but the EU commission president, Jean-Claude Juncker, was delighted:

We are setting standards which will determine globalisation in the coming years. Nothing in other trade agreements will be able to remain below the level of what we have reached today with Canada.

Although May was at pains to say Britain would not seek to replicate any existing model in its future relationship with the EU, and Juncker saw “no relation between what we are signing today and the Brexit issue”, there were Brexit lessons aplenty in the Ceta saga.

Perhaps the most important is that on a continent that seems increasingly sceptical about the value of trade deals, 38 national and regional assemblies will have a final say on the future UK-EU agreement – and several will seek to use it.

As Guillaume Van der Loo, a trade expert at the Centre for European Policy Studies, told the Guardian’s Jennifer Rankin, any Brexit trade deal will be political, and Britain will need to meet the concerns of each EU county and region:

Member states are no longer reluctant to put their foot in the door and stop an agreement in order to gain what they want.

One of the things France might well want is the end of the Le Touquet treaty under which Britain carries out border checks on French soil. As the migrant and refugee camp in Calais was finally demolished last week, it is becoming increasingly clear that the future of the treaty could become part of wider Brexit talks.

France will be one of the loudest voices calling for a hard line if Britain opts for a hard Brexit. As Alain Juppé, the man currently most likely to be the country’s next president, reminded the Guardian recently, a “complete renegotiation” of Le Touquet could well be part of the mix.

Meanwhile, back in Westminster

At least Bank of England governor Mark Carney, Britain’s most high-profile migrant worker, is going to hang around for a year longer than he needed to, until July 2019 – and he has the full backing of the PM. Crucially, that means he’ll be in charge through the two-year article 50 leaving process.

Facebook Twitter Pinterest Mark Carney. Photograph: Stefan Wermuth/Reuters

The Canadian has felt the wrath of several Eurosceptic MPs over his negative pre-referendum predictions of the economic risks of Brexit, with remoaner-hunters Daniel Hannan, Jacob Rees-Mogg, Bernard Jenkin and Nigel Lawson all calling for him to resign.

Carney had been tipped to announce his decision about serving his full eight-year term on Thursday.

Had he chosen to go, as US economist Adam Posen pointed out on Twitter, it would be the method of his departure, rather than losing the man himself, which would be a disaster.

“It’s not about Carney. All central bankers are replaceable,” said Posen, a former member of the Bank of England’s monetary policy committee. “It’s about a government that attacks any disagreement. So they’d put in a stooge.”

Labour’s shadow chancellor, John McDonnell, also rallied to Carney’s defence this week, saying his party would fight to preserve the central bank’s independence.

“Labour gave the Bank of England independence to stop Tory chancellors leaving monetary policy to the whims of their backbenchers,” McDonnell said, calling that independence “sacrosanct”.

His speech also issued new demands for the government not to pursue a sweetheart deal for the City at the expense of manufacturers and small businesses.

(Unfortunately for McDonnell, instead of warning of the dangers of a “bankers’ Brexit”, a slip of the tongue saw him rail against a “bankers’ breakfast”, presumably kippers and champagne, which sounds rather delicious.)

You should also know that:

Read these:

In the Guardian, Nick Cohen argues that Theresa May lied to get her job as PM – and is lying to us now, to make us believe she is acting in our best interests whereas she is in fact “a prime minister of pretences”:

She pretends that we should leave the EU, even though she knows we should remain a member of the single market. She offers us the illusion that we are taking back control, even as we lose our freedom to act. She cuts deals in secret, in the hope that the public will never realise that her land of make-believe is an expensive place to live.

Brief but characteristically smart, Stephen Bush in the New Statesman says the kerfuffle over Carney’s decision to stay or go reflects Britain’s increased vulnerability on international markets in the wake of the Brexit vote:

If for the last four decades, Britain had the security – and the limitations – of a boat in the harbour, the country is about to exchange that for the freedom and vulnerability of a ship at sea … The future direction of British politics depends to a great extent on whether the 17 million who voted for leave feel that was part of the bargain – and if the 16 million who did not can be reconciled to that trade-off at all.

In the FT (paywall), Wolfgang Münchau argues the government’s Nissan deal offers a pointer to a possible soft Brexit solution: a lengthy transition – say 10 years – followed by either a hard Brexit or some kind of EEA-style association agreement.

The immigration issue, Münchau says, can be dealt with in all sorts of creative ways – including simply imposing a five-year minimum residency requirement on NHS access and welfare benefits, pretty much as Germany has done:

Starting from where we are, the EEA is the best of the remaining options. It works for Nissan. It works for Scotland and Northern Ireland. And, most importantly, it will work for the prime minister. As someone who has been on both sides of the Brexit arguments virtually simultaneously, she incorporates both thesis and antithesis. Hegel taught us where that ends up.

Tweet of the week

More like political longhand, but not bad all the same:

Robert Hutton (@RobDotHutton) Unforeseen legacy of the Brexit campaign: "Written down the side of the bus" now apparently British political shorthand for "blatant lie".



