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UK says talks will go to wire as Nissan warns on Brexit doubts

Feb 04 2019 06:00
Tim Ross, Bloomberg

The UK government is warning that Brexit negotiations are likely to go down to the wire, with the threat of a chaotic no-deal split casting a shadow over businesses right up to next month’s deadline.

“I’m afraid it’s inevitable that in these types of negotiations things do get decided close to the last minute - that’s when the maximum political pressure is,” Chief Secretary to the Treasury Liz Truss told BBC Radio 5 Live.

For businesses the stakes are getting higher every day. Nissan, who once viewed Britain as its gateway to Europe, is now citing growing uncertainty over Brexit in its decision to scrap plans to build a new model in the country.

Truss insisted that the “threat of no deal” must be maintained to get the European Union “on board” and also because it’s already helping to bring Parliament closer to a consensus.

Her comments suggest the final eight weeks until March 29 - the UK’s scheduled exit day - will be fraught with tension. The continuing doubt over Brexit is causing difficulties for companies, and Nissan on Sunday confirmed it’s ditching plans to make the latest X-Trail sport-utility vehicle at the UK’s biggest car factory in northeastern England.

“We appreciate this will be disappointing for our UK team and partners,” Nissan Europe Chairman Gianluca de Ficchy said. “While we have taken this decision for business reasons, the continued uncertainty around the UK’s future relationship with the EU is not helping companies like ours to plan for the future.”

The government expressed disappointment, but said no existing jobs will be lost. “Nissan’s announcement is a blow to the sector and the region, as this was to be a further significant expansion of the site and the workforce,” Business Secretary Greg Clark said.

As time runs out to secure a Brexit deal, Prime Minister Theresa May is expected to return to Brussels within days in an attempt to re-write the most difficult chapter in the agreement she drafted with the EU last year.

May’s goal is to maintain the backing of pro-Brexit politicians in her Tory party, and members of the small Democratic Unionist Party, so she can get a deal through Parliament in a vote she’s aiming to hold later this month. In order to achieve that, she needs the EU to agree to make legally binding changes to the insurance policy for avoiding a hard border with Ireland.

Critics of the backstop - including Tory euroskeptics and the DUP - fear the UK will be tied into the EU’s trade rules permanently, while Northern Ireland could end up splitting away from the mainland British economy. These concerns drove a huge rebellion against May’s exit deal in a vote in Parliament last month.

Another vote in the House of Commons last week endorsed the divorce package - but with the caveat that the backstop must be replaced with alternative arrangements.

So far, European leaders and officials have publicly insisted they will not reopen the negotiations. On Sunday, May and her ministers stepped up their campaign to persuade EU politicians to change their minds. Trade Secretary Liam Fox told Sky News that European leaders are being “irresponsible” to rule out even discussing the possibility of making changes to the Irish border backstop, while Home Secretary Sajid Javid said the technology already exists to avoid the need for the backstop arrangement.

theresa may  |  uk  |  eu  |  uk economy  |  brexit
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