Burnham to Unveil EU Deals With £17bn Economic Upside Claimed

By Amara Osei

A package of three planned EU trade deals could add £17 billion to the UK economy, a 0.4% increase, Prime Minister Andy Burnham said on Tuesday. He plans to unveil the agreements in Brussels on 20 November.

Burnham is scheduled to meet Ursula von der Leyen, president of the European Commission, and António Costa, president of the European Council. The leaders are expected to announce agreements covering agriculture, emissions trading and youth mobility.

What does the November package cover?

Officials on both sides said the final text for all three deals is close to agreement, though key details remain unresolved. Those details include the number of young people who may travel under the mobility scheme.

• Agriculture: The government expects an agricultural agreement to be worth over £5 billion to the UK economy by 2040.
• Emissions trading: The UK would pay the EU for access to its emissions trading scheme and avoid a cross-border carbon tax.
• Youth mobility: Britain and the EU would issue visas to tens of thousands of people under 30.

Under the proposed agricultural agreement, UK companies and travelers would no longer need a certificate to transport live animals, including pets, into Europe. Travelers bringing domesticated animals into the bloc would receive a pet passport, replacing the paperwork required for each trip.

UK producers could continue selling certain products banned under EU law, including some pesticides, during a “transition period.” The agreement would also liberalize trade in live molluscs and Scottish salmon.

Britain and the EU would issue visas allowing people under 30 to live, work and travel in each other’s territories under the proposed “youth experience scheme.” Each European member state would receive its own quota to spread the benefits and potential costs among participating countries.

Britain is negotiating an emergency brake-style mechanism for the youth scheme. If a member state refused to issue its quota, the UK could restrict the number of that country’s nationals traveling to Britain.

What would the emissions agreement require?

The UK would pay the EU billions of pounds to avoid a cross-border carbon tax scheduled to take effect next January. Under a separate agreement, Britain would join the EU emissions trading scheme to avoid being excluded from the market.

Critics contend that the arrangement leaves Britain subject to the same regulatory rules it sought to avoid when it left the bloc. People close to the negotiations insist that disagreements over European industrial policy and UK university fees will not derail the agreement process.

Parts of the package will not take effect until 2028. That phased timetable allows the three deals to progress while leaving several disputed files for later negotiation.

What does Burnham expect from the deals?

Burnham told The Economist on Tuesday: “A deal could add up to 0.4% to GDP. Now that is a number that you cannot ignore.” His advisers believe the agreements will strengthen his efforts to forge much closer ties with the EU and potentially rejoin the bloc.

Burnham also told ITV:

“Public opinion has changed nationally. But I want to be really clear on this issue. I will not run ahead of public opinion. The public need to be the boss when it comes to whatever happens with Brexit.”

What else is under negotiation?

The UK and EU have begun talks on a separate joint statement covering future cooperation, including industrial policy and university tuition fees. A draft prepared by the EU, but not yet agreed by the UK, seeks agreement within six months on charging European students lower fees in Britain.

The Guardian reported that London was willing to spend hundreds of millions of pounds compensating universities for financial losses caused by lower European tuition fees. That support would depend on the EU granting Britain access to its protectionist “Made in Europe” scheme.

The EU draft describes the two sides as “trusted partners,” language the UK believes would allow it to participate in Made in Europe. European countries are also pressing Britain to accept higher tariffs on Chinese electric vehicles, a position resisted by UK ministers and businesses.

The European draft says the two sides will “cooperate closely and explore further solutions” on Chinese electric vehicles. It also indicates that the UK is likely to contribute financially to the EU’s “cohesion” budget, which supports poorer member states, although the UK has not approved that payment.

The EU has separately asked London to drop an accelerated programme to deport “foreign national offenders from the UK to the EU.” That request remains unresolved, while the cohesion contribution is considered more likely to feature in a future agreement.

How far does Burnham want the reset to go?

The November package forms one half of Burnham’s effort to reset Britain’s relationship with Europe. He is also preparing a major statement on how the UK should interact with the EU, including the possibility of re-entry.

Downing Street said the statement would take place “around the time of the summit.” Officials have not decided whether it will come before, during or after the 20 November meeting.

The immediate tests are the final visa numbers, the fee agreement and the EU’s tariff demands. Burnham’s separate vision statement will show how far he intends to take the reset, including whether he will pursue possible re-entry.