UK: More clarity on the preferred Brexit end-state - Rabobank

Prime Minister (PM) May’s long-awaited key speech on the future relationship with the EU provided a bit more clarity on the government’s preferred Brexit end-state, but brought few
new insights, according to analysts at Rabobank.

Key Quotes

“The British government reiterated its interest in maintaining current rights and obligations in some sectors while diverging to various extent in others; it also reiterated well known demands such as autonomous legislation and trade policy and no hard Irish border.”

“The speech failed to address key concerns of the EU, as illustrated by the EU Council‘s negotiation guidelines for the post-Brexit partnership with the UK; the guidelines were published only a few days after May’s speech and position the EU at far distance from the UK ahead of the 22-23 March EU Summit.”

“Labour’s move on 26 February to officially support a permanent customs union with the EU could affect parliamentary dynamics to PM May’s disadvantage if Labour and pro-EU Tories were to join forces.”

“Our base case for the post-Brexit partnership agreement remains a transition period followed by a Free Trade Agreement; though Labour’s official endorsement of a customs union tilts the probability of it being included in the agreement.”