Posts Tagged ‘trade’

EU’s Juncker says the British ‘have to pay’

October 13, 2017
© AFP | EU Commission chief Jean-Claude Juncker delivers a speech at the European Parliament in Strasbourg, eastern France, October 3, 2017

LUXEMBOURG (AFP) – EU Commission chief Jean-Claude Juncker said Friday that Britain must “pay” for its financial commitments to start Brexit trade talks, comparing it to someone trying to leave a bar after a round of beers.

Juncker’s comments come a day after EU negotiator Michel Barnier said there was a “disturbing deadlock” over the bill, and not enough progress for leaders to agree at a summit next week to open talks on future relations.

“The British are discovering, as we are, day after day new problems. That’s why this process will take longer than initially thought,” Juncker said in a speech at a university in his native Luxembourg.

“If you are sitting in a bar and if you are ordering 28 beers and then suddenly some of your colleagues is leaving… that’s not feasible, they have to pay, they have to pay,” Juncker said.

“Not in an impossible way, I am not in a revenge mood, I am not hitting the British. The Europeans have to be grateful for so many things Britain has brought to Europe, during war, after war, before war, everywhere and every time.

“But now they have to pay.”

The former Luxembourg prime minister added that a row over the rights of three million EU citizens living in Britain was “nonsense”.

“I don’t even understand this problem. Why not say easily, with common sense, which is not a political category as we know, that things will stay as they are?” Juncker said.

The EU says Britain has to make sufficient progress on three divorce issues — the bill, the rights of EU citizens in Britain, and Northern Ireland — before opening the trade negotiations London wants.

EU sources have put the budgetary commitments it says Britain owes at around 100 billion euros ($118 billion), while Britain says the true figure is about one-fifth of that.

EU leaders meeting in Brussels next week are expected to say that there is not likely to be enough progress until the next summit in December, but that the bloc should begin internal preparations for trade talks now.


Theresa May caught in Brexit trap after EU leaders block future trade talks

October 13, 2017

By Jon StoneRob Merrick
The Independent

EU leaders rule Britain must pay up to move the negotiations on – but the Prime Minister’s MPs tell her ‘no more concessions’


Theresa May has been caught in a Brexit trap after EU leaders ruled Britain must pay up to secure future trade talks, while her own MPs demanded she make no more concessions.

The heads of the EU states agreed the UK had not made “sufficient progress” on the withdrawal divorce terms, according to a leaked statement drafted by Donald Tusk, the President of the European Council, just hours after confirmation that the talks are deadlocked.

They backed the EU’s chief negotiator Michel Barnier, after he said negotiations over future trade with Britain would be blocked until Ms May gave ground on paying the UK’s Brexit “divorce” bill and guaranteeing citizens’ rights.

But Conservative Brexiteers demanded the Prime Minister refuse to “feed the monster” and called on her to walk away from the negotiating table if the EU did not start talking trade.

The leak appeared to make clear that, at a key meeting of the European Council next week, EU leaders will confirm Mr Barnier’s refusal to consider trade talks now as the official stance of all member states.

Ministers in the UK have been trying to play down the significance of the blow, but pressure is building on Ms May to ensure talks progress with the time for Brexit negotiations running out before the country crashes out of the union without a deal.

Mr Barnier used a press conference to say talks had strayed into a “disturbing” deadlock and could not move on without more ground being given by UK negotiators on the EU’s priorities.

Afterwards, Antonio Tajani, the president of the European Parliament told The Independent Ms May should “deal with those” on the British side who were seeking to “unrealistically raise expectations”.

“The current situation shows that the European Parliament was correct to express its concerns over Brexit negotiations earlier this month and Mr Barnier’s position is understandable,” he said.

“The deadlock unfortunately means continuing uncertainty for millions of citizens both in the UK and EU27, as well as an emotionally-charged situation in Northern Ireland that must imperatively be resolved before moving forward. The European Parliament has been unambiguous on these matters.

“I believe that the Prime Minister is genuine in her efforts to come to an agreement with the EU27 and realises that time is of the essence, but she must also deal with those who continue to challenge the agreed sequencing and unrealistically raise expectations.”

Guy Verhofstadt, the European Parliament’s Brexit chief, also backed Mr Barnier’s statement that there would be “no concessions”.

“The European Parliament is fully behind Barnier,” Mr Verhofstadt said. “There’s no sufficient progress, it’s high time the UK government comes up with concrete proposals.”

Manfred Weber, a German ally of Angela Merkel’s CDU/CSU party and the leader of the parliament’s largest group, also indicated his support – undermining Brexiteers’ hopes that the re-elected German Chancellor might push for a softer line for the UK at the forthcoming Council meeting.

In London, former Conservative Cabinet minister Nicky Morgan said there was a growing “sense of panic” among business leaders as the talks flirted with failure.

“Employers are putting in place contingency arrangements and they will have to start pressing go sooner or later,” she told The Independent.

She again criticised Boris Johnson’s recent setting out of Brexit red lines, saying: “Any mixed messages about our commitment to what was said by the Prime Minister in Florence can only be unhelpful in the negotiations.”

But while Brussels refused to allow Ms May to move talks forward without further compromise, Brexit-backing Tories in London were adamant that she not give way, but play hardball.

John Redwood said: “The Government should press on with preparing to leave without a deal. In due course the EU will then probably tell us they do want tariff free trade and will then be prepared to talk about it.”

Iain Duncan Smith said Britain should be ready to walk away from the negotiating table if the EU was still refusing to break the deadlock at the end of the year.

“It will then become very apparent that the EU is not going to do so, and we will need to say that we will make other arrangements.”

Andrew Bridgen told The Independent he backed a plan to walk away from negotiations unless the EU begins to talk trade by Christmas.

He said: “You don’t feed the monster. There is no point in continuing to make concessions until they are ready to seriously negotiate.

“There negotiating position is not to give us anything, and saying there will be no progress unless we offer more. We should say we are going to go away and better use our time preparing for a ‘no deal’ situation.”

According to the leak, obtained by Reuters, the EU leaders will tell Britain to improve its offer – while offering the prospect of a rapid move to free-trade talks in December if that happens.

The draft suggests immediate internal work on possible transitional arrangements, in order to be able to move ahead with negotiations on a future relationship as soon as possible.

“At its next session in December, the European Council will reassess the state of progress in the negotiations with a view to determining whether sufficient progress has been achieved,” the draft said.

Preparations for a ‘no deal’ Brexit were at the heart of another major Brexit split in the cabinet this week – triggering a call for the Prime Minister to sack her Chancellor.

Philip Hammond warned diverting funds would mean less money for the NHS and social care – insisting he would not sanction it until the “very last moment”, if the need became clear.

But Ms May vowed to spend taxpayers’ cash immediately, telling MPs on Wednesday: “We are committing money to prepare for Brexit, including a no deal scenario.”

Ministers will be allowed to spend the cash before they’ve been given normal parliamentary approval, by issuing a “technical direction” the Treasury revealed.

Lord Lawson, the former Chancellor, called for Mr Hammond to be sacked, saying: “He may not intend it, but in practice what he is doing is very close to sabotage.”

Meanwhile, the Prime Minister’s official spokesman was forced to confirm she still had “full confidence” in the Chancellor .

Brexit Talks Deadlocked as Both Sides Prepare for Cliff Edge

October 12, 2017


By Ian Wishart and Tim Ross

  • Barnier says there were no negotiations about the bill
  • EU puts onus on U.K. to find ‘political will’ to reach a deal
David Davis and Michel Barnier
Barnier Says Brexit Talks Have Reached ‘Deadlock’

Follow @Brexit for all the latest news, and sign up to our daily Brexit Bulletin newsletter.

The European Union said talks hit an impasse over what the U.K. owes when it leaves, increasing the chances of a messy departure as time is running out to clinch a deal.

The pound fell to the weakest in a month after chief EU negotiator Michel Barnier said there had been no discussions over the all-important bill that the U.K. has to agree it will pay before the EU will start trade talks.

Read more about Brexit’s costs and whether Britain will pay up

Barnier put the onus firmly on the U.K.’s squabbling government to find the political will to move the talks forward, while both sides raised the prospect of talks breaking down without an agreement — throwing businesses into a chaotic legal limbo.

“No deal will be a very bad deal, huh? And to be clear on our side we will be ready to face any eventualities and all eventualities,” Barnier, told reporters in Brussels on Thursday. After his words, the pound traded down by as much as 0.6 percent against the euro.

On the question of the financial settlement — the most intractable of the three pressing issues — Barnier said: “We have reached a state of deadlock which is very disturbing for thousands of project promoters in Europe and it’s disturbing also for taxpayers.”

Barnier noted that Prime Minister Theresa May had pledged in her speech in Florence last month that the U.K. would continue to pay into the EU budget for two years after the split.

He signaled disappointment that this wasn’t followed up in the negotiations this week. But in return for those payments, May wants a two-year transition period to ease the anxiety for businesses.

Different Interpretation

But the U.K. understood his words as an elegant cry for help from the Frenchman to the 27 European leaders, according to a person familiar with the U.K. team’s negotiating position: a plea to them to loosen up his mandate so he can start talking about the future alongside the divorce terms.

If true, between now and the summit a week away, signs of movement may come from the rest of the European capitals. May’s government believes the ball is still in the EU’s court — and it is now for the other leaders to decide if they want to unlock the talks.

Barnier held out hope that progress could be made at a summit in December, if the U.K. fleshes out more what May alluded to in Florence less than a month ago. That will be hard in a Conservative government constantly at war with itself on the direction of Brexit — her own chancellor was mauled by euro-skeptics for his reluctance to plow money into non-deal contingency plans.

December Target

Starting trade talks in December leaves less than a year to get a deal on trade and the transition. Some businesses won’t wait around to see the outcome, with banks the first taking steps to go. Crashing out of the bloc would wreak havoc on the economy, affecting flights, financial markets and pharmaceuticals and slapping tariffs on all foreign trade.

The U.K. is still butting against the EU’s timetable, saying it can’t sort the divorce issues, such as the U.K.’s new EU land border that will bisect the island of Ireland — until trade talks are under way.

With talks showing increasing brinkmanship, Brexit Secretary David Davis said: “I make no secret of the fact that to provide certainty, we must talk about the future.”

The focus now turns to the summit next week of the EU’s 27 leaders. Initially trade talks were expected to start at that meeting, now the U.K. can hope for little more than encouraging words — or chinks in the EU’s armor.

— With assistance by Richard Bravo, Nikos Chrysoloras, Viktoria Dendrinou, and Jones Hayden

Includes video:


BBC News

The EU’s chief negotiator Michel Barnier says there has not been enough progress to move to the next stage of Brexit talks as the UK wants.

He said there was “new momentum” in the process but there was still “deadlock” over how much the UK pays when it leaves, which he called “disturbing”.

Brexit Secretary David Davis said he still hoped for the go-ahead for trade talks when EU leaders meet next week.

The pair were speaking after the fifth round of Brexit talks in Brussels.

Mr Barnier said: “I am not able in the current circumstances to propose next week to the European Council that we should start discussions on the future relationship.”

The UK’s Brexit Secretary David Davis urged EU leaders at the summit, on 19 and 20 October, to give Mr Barnier a mandate to start trade talks and to “build on the spirit of cooperation we now have”.

He said there had been progress on the area of citizens’ rights that had moved the two sides “even closer to a deal”.

The EU chief negotiator told reporters at the joint press conference he hoped for “decisive progress” by the time of the December summit of the European Council.

He said Theresa May’s announcement that Britain would honour financial commitments entered into as an EU member was “important”.

But he said there had been no negotiations on the issue this week because the UK was not ready to spell out what it would pay.

“On this question we have reached a state of deadlock which is very disturbing for thousands of project promoters in Europe and it’s disturbing also for taxpayers.”

Not doomed yet

Analysis by BBC Political Editor Laura Kuenssberg

Not even Brexit’s biggest cheerleader could claim the discussions in Brussels have been going well. And there are visible frustrations on both sides.

But before claiming this morning’s drama means the whole thing is doomed there are a few things worth remembering.

At the very start of this whole process, the hope was that in October, the EU would agree to move on to the next phase of the talks, to talk about our future relationship. But for months it has been clear that the chances of that were essentially zero.

It is not, therefore, a surprise to hear Mr Barnier saying right now, he doesn’t feel able to press the button on phase 2, however much he enjoyed the drama of saying so today.

Second, behind the scenes, although it has been slow, there has been some progress in the talks but officials in some areas have reached the end of the line until their political masters give them permission to move on.

Read Laura’s full blog

The so-called divorce bill covers things like the pensions of former EU staff in the UK, the cost of relocating EU agencies based in the UK and outstanding commitments to EU programmes. The UK has said it will meet its legal requirements and there has been speculation the bill could be anywhere between £50bn and £100bn, spread over a number of years.

BBC Europe Correspondent Kevin Connolly said the UK sees its total financial commitment “as its best negotiating card to be played somewhere near the end of the talks – the EU wants that card to be shown now at a point which is still relatively early in a two-year game”.

Boris Johnson: Time to put ‘tiger in tank’ on Brexit talks

Media captionBoris Johnson: Time to put ‘tiger in tank’ on Brexit talks

The UK has also offered to keep paying into the EU budget during a proposed two-year transition period.

The EU had two other issues on which it would not make any “concessions”, said Mr Barnier – citizens’ rights and the Northern Ireland border.

On the status of the border, Mr Barnier said negotiations had “advanced” during this week’s discussions.

But he said there was “more work to do in order to build a full picture of the challenges to North-South co-operation resulting from the UK – and therefore Northern Ireland – leaving the EU legal framework”.

Asked about speculation that the UK could exit the EU in March 2019 without a trade deal, Mr Barnier said the EU was ready for “any eventualities” but added: “No deal will be a very bad deal.”

Mr Davis said: “It’s not what we seek, we want to see a good deal, but we are planning for everything.”

Both men said progress had been made on citizens’ rights, with Mr Davis saying there would be an agreement “soon” to ensure EU nationals in the UK would be able to enforce their rights through the UK courts.

He said EU citizens would still have to register with the UK authorities but the process would be streamlined to make it as simple and cheap as possible.

According to Mr Davis, the remaining sticking points include:

  • The right to bring in future family members
  • The right to “export a range of benefits”
  • To “continue to enjoy the recognition of professional qualifications”
  • To vote in local elections
  • To “leave for a prolonged period and yet continue to enjoy a right to remain or permanent right of residence on return”

Labour leader Jeremy Corbyn said: “I think it’s quite shocking. We’re now 15 months on since the referendum and the government seems to have reached deadlock at every stage.”

He said “falling out” of the EU without a trade deal would threaten “a lot of jobs all across Britain”.

MStarmer: “We need to grasp the urgency.”

Labour is calling for “emergency” talks between Mr Davis and the EU early next week, to try to break the deadlock ahead of the EU summit.

Earlier this week, European Council President Donald Tusk warned that if the current “slow pace” of negotiations continued the UK and the EU would “have to think about where we are heading”.

He suggested that the green light to begin talks about a post-Brexit trade deal would not come until December at the earliest.

Last month Prime Minister Theresa May used a speech in Florence to set out proposals for a two-year transition period after the UK leaves the EU in March 2019, in a bid to ease the deadlock.


Legal Intricacies Complicate May’s Two-Year Brexit Transition Period

October 12, 2017

Need to quickly devise sweeping agreements suggests it might be easier to extend the breakup deadline beyond 2019

It cannot be emphasized enough that the European Union is not really a political project so much as a legal one.

Of course, the EU tries to find political solutions to its members states’ common political problems. But those solutions have to comply with the EU’s legal order, which is based on the EU treaties. Sometimes, the only solution is to change the treaties themselves—but that process is complicated, and even then any changes need to be consistent with the rest of the legal order. That can sometimes make it impossible to find a political solution even when the solution may seem obvious or the consequences of failing to do so stark. Just ask David Cameron, whose failure to secure significant curbs on the free movement of EU citizens is blamed by some for Brexit.

Now Mr. Cameron’s successor is making her own demands for a political solution to the problems caused by Brexit. Prime Minister Theresa May wants a transition deal—what she calls an “implementation period”—to enable the U.K. to continue to trade with the EU “on current terms” for around two years after the U.K. quits the EU in March 2019 while the UK’s new trading relationship with the EU is agreed to and arrangements put in place. The EU also needs time to prepare for the change. Yet devising a legally watertight way for the U.K. to continue to trade with the EU “on current terms” while no longer an EU member is likely to prove fiendishly difficult—some would argue impossible. Both British and EU officials acknowledge that they are at an early stage of grappling with the complexities.

The first challenge is that to preserve frictionless trade, the transition deal will need to find a way to replicate the UK’s existing commercial relationship with the EU in its entirety. That means that the U.K. will not only need to negotiate a temporary customs union with the EU that matches the existing customs union, but also a new regulatory relationship that allows full mutual recognition of testing and enforcement processes across all sectors, says Peter Holmes, reader in economics at the University of Sussex. The moment exceptions are introduced, there will need to be border checks, whether for customs or regulatory purposes. That could be tricky because there are some sectors where the U.K. may want to exempt itself from EU rules immediately. For example, environment minister Michael Gove says he wants to take back control of U.K. fisheries to avoid remaining subject to annual EU quotas set by Brussels. Yet if fisheries are excluded, “then every lorry will face random risk-based checks to see if there is a fish in it,” says Mr. Holmes.

A second issue concerns the 40 free trade agreements the EU has with third countries. These also need to be replicated in their entirety to avoid new barriers to trade. (Again any divergence from the EU’s commercial policy will lead to new trade barriers.) Yet rolling over these agreements, as the U.K. says it wants to do, isn’t straightforward. The problem is that once the U.K. itself becomes a third country, British goods containing substantial EU components may no longer count as British under the complicated rules of origin that govern world trade—and vice versa.

To change these rules to enable pan-European supply chains to remain in tact will require a three-way negotiation involving the U.K., EU and each of the countries with which the EU now has an free-trade agreement. As the U.K. is already discovering after running into opposition from the U.S., New Zealand and others over a deal reached with the EU at the World Trade Organization to divide up current EU agricultural quotas, other countries will robustly defend their interests.

A third issue is that whatever the EU offers to the U.K. by way of a temporary treaty also risks creating a precedent. In the British public debate, there is an assumption that the EU wants to punish the U.K. to deter others from leaving. But the EU is equally concerned that whatever it offers the U.K. doesn’t lead to demands from other non-EU countries for similar terms. The EU-Korea trade agreement contains a most-favored-nation clause that obliges each side to offer each other the same terms on access to their services markets that they offer in future trade deals to other third countries. A transition deal that allowed the U.K. full access to its financial-services market could become the basis for a demand for similar treatment from Korea.

The reality is that the only legally watertight transition deal that is guaranteed to enable trade to continue on “current terms” is an agreement to extend the Article 50 deadline. This can be done by unanimous decision of the member states. Of course, extending the UK’s EU membership beyond 2019 would be politically fatal for the current government, though it’s possible a majority would support it in parliament. It would also be politically toxic in the EU: There is a growing consensus that this is a bad marriage that just needs to end, says one senior EU diplomat. And extending Article 50 raises serious practical issues, including whether the U.K. would participate in EU parliamentary elections in 2019 and the next EU budget.

But those obstacles may yet prove easier to overcome than devising a way to replicate in full the EU customs union, the single market and 40 free-trade agreements from scratch in one year.

Trump Sets Nafta Goals: Dilute Pact’s Force, Loosen Regional Bonds

October 11, 2017

Proposals spark a backlash from Mexico and Canada and from business groups in all three countries

WASHINGTON—The Trump administration has honed its strategy for remaking the North American Free Trade Agreement in advance of the next round of talks starting Wednesday—by proposing a number of specific ways to water down the pact and reduce its influence on companies.

U.S. trade officials have made that theme clear in recent days, prompting a backlash from Mexico and Canada and from business groups in all three countries, casting new uncertainty over the talks as they resume in Washington.

Theresa May sets out Brexit options including ‘no deal’ — “The ball is in their court” — But the EU says “the ball is entirely in the UK court”

October 10, 2017

BBC News

Media caption Theresa May says: “The ball is in their court”

The UK has set out how it could operate as an “independent trading nation” after Brexit, even if no trade deal is reached with Brussels.

Prime Minister Theresa May told MPs “real and tangible progress” had been made in Brexit talks.

But the country must be prepared for “every eventuality”, as the government published papers on future trade and customs arrangements.

Labour said “no real progress has been made” since last June’s referendum.

BBC political editor Laura Kuenssberg said a “no deal” scenario was starting to appear “more likely” even if it was not something either side in the talks wanted.

Mrs May’s statement comes as the fifth round of negotiations began in Brussels. Focusing on technical issues, it is the final set of talks before EU leaders meet on 19 October to decide if enough progress has been made to talk about post-Brexit relations with the UK, including trade.

European Commission spokeswoman Margaritis Schinas said “the ball is entirely in the UK court” to reach agreement on Britain’s “divorce deal”, without which the EU has said it will not move on to the second phase of talks.

Mrs May appeared to reject that in her statement to MPs, saying: “As we look forward to the next stage, the ball is in their court.

“But I am optimistic we will receive a positive response.”

Mrs May also confirmed that the UK would remain subject to the rulings of the European Court of Justice during a planned two-year transition period after Britain leaves the EU in March 2019.

Responding to a challenge from Eurosceptic Conservative MP Jacob Rees-Mogg, she told MPs the need to ensure the minimum of disruption “may mean that we will start off with the ECJ still governing the rules we’re part of for that period”.

She said it was “highly unlikely” any new EU laws would come into force during the transition, but did not rule out the possibility that any which did so would have effect in Britain.

Media caption asks Jeremy Corbyn: “What on earth the government has been doing?”

The prime minister rejected existing models for economic co-operation, such as membership of the European Economic Area or the Canadian model, calling instead for a “creative” solution that would be “unique” to the UK.

But she also stressed – as she has done before – that the government was preparing for “every eventuality,” reinforcing her long-held position that walking away without a deal is a possibility.

She rejected a call from a Tory MP to name a date when the UK would walk away from talks without an agreement, saying “flexibility” was needed.

On Northern Ireland, she said the government had begun “drafting joint principles on preserving the Common Travel Area, and associated rights and we have both stated explicitly we will not accept any physical infrastructure at the border”.

The two White Papers give the most detail yet of contingency planning that is under way.

Grey line

What’s in the White Papers?

Customs union

By Chris Morris, BBC Reality Check correspondent

The White Papers set out three strategic objectives: ensuring UK-EU trade is as frictionless as possible, avoiding a hard border between Ireland and Northern Ireland, and establishing the UK’s own independent international trade policy.

But there is also contingency planning, in case the UK leaves the EU without a negotiated settlement.

A customs bill will make provision for the UK to establish a stand-alone customs regime from day one, applying the same duties to every country with which it has no special deal.

The level of this duty would be set out in secondary legislation before the UK leaves the EU.

For high-volume roll-on roll-off ports, the legislation would require that consignments are pre-notified to customs authorities, to try to ensure that trade continues to flow as seamlessly as possible.

“No deal” is not the government’s preferred option; and the detail in the customs paper in particular hints at how disruptive it could be. But the UK wants the EU to know that it is planning for all eventualities.

Grey line

Labour leader Jeremy Corbyn said the government had spent the 15 months since the EU referendum “squabbling amongst themselves” and were making a “mess” of Brexit.

He urged Mrs May to unilaterally guarantee the rights of EU citizens in the UK, as well as criticising the lack of progress on Northern Ireland.

The SNP’s leader at Westminster, Ian Blackford, said there had not been a single mention of the devolved administrations in Mrs May’s speech, as he called for urgent action on EU citizens’ rights.

The Liberal Democrats, who want a referendum on any final Brexit deal, urged the prime minister to “show real leadership” by ring-fencing the issue of EU citizens’ rights, confirming the UK will remain in the single market and customs union and firing Foreign Secretary Boris Johnson.

Jacob Rees-Mogg told the BBC he was “troubled” by the PM’s statement: “If we’re remaining under the jurisdiction of the ECJ then we haven’t left the European Union or the date of departure is being delayed.”

But Boris Johnson said the UK would “still be able to negotiate proper free trade deals” during the transition period.

Boris Johnson has called on Tory colleagues to turn their fire on Jeremy Corbyn

“She (Theresa May) has reaffirmed the destination of a self-governing, free-trading, buccaneering and Global Britain taking back control over our laws, money, and borders,” he said in Facebook post.

“The future is bright. Let’s keep calm and carry on leaving the EU.”


See also The Telegraph

Theresa May reveals detailed plans for walking away with ‘no deal’ on Brexit

UK and EU clash over next Brexit step

October 9, 2017



© HO, PRU, AFP | Prime Minister Theresa May told the House of Commons that “the ball is in [the EU’s] court”.

Video by Bénédicte PAVIOT


Latest update : 2017-10-09

Britain and its European Union partners clashed on Monday over which side should make the next move to unblock Brexit talks, despite concerns they will miss a deadline for a divorce deal and that London is heading for a chaotic departure.

Prime Minister Theresa May made clear in a speech she delivered to parliament that she hoped her EU partners would make proposals at a new round of talks opening the way to the next stage of negotiations, saying “the ball is in their court”.

But even before she had delivered the speech, an EU spokesman hit back in Brussels, saying “the ball is entirely in the UK court for the rest to happen”.

May is desperate to try to regain some of her authority and refocus on talks to unravel 40 years of union after a speech at her party conference last week, marred by a repetitive cough, a prankster and a stage malfunction, left her weaker than ever.

She has so far fought off attempts to unseat her by critics already angry over an ill-judged election when she lost her governing Conservatives’ majority, but her weakness has opened the door for many in her party to challenge her Brexit strategy with just 18 months to go before Britain leaves the EU.

With Brussels quietly preparing for a collapse in the talks and Britain getting ready for what May calls “every eventuality”, some officials and business chiefs worry the country will crash out of the EU without a deal.

Speaking in parliament, May said her negotiators had made progress on the first phase of talks, tackling the rights of expatriates and the border with EU-member Ireland, and that she was determined to secure a new partnership with the other 27 members of the wealthy political and trade bloc.

“Achieving that partnership will require leadership and flexibility, not just from us but from our friends, the 27 nations of the EU,” she told a raucous session of parliament.

“And as we look forward to the next stage, the ball is in their court. But I am optimistic we will receive a positive response.”

But the EU stuck to its policy: “There is a clear sequencing to these talks and there has been so far no solution found on step one, which is the divorce proceedings,” European Commission spokesman Margaritis Schinas told a regular briefing.

“So the ball is entirely in the UK court for the rest to happen.”

‘See what happens’

May, who hosted businesses on Monday to listen to their Brexit concerns, is keen to push the talks beyond a discussion of the divorce to try to offer firms some certainty about future trading conditions.

But a lack of progress in talks some 15 months after Britain voted to leave the EU in a referendum has added pressure on May, who was criticised by the opposition for failing to offer any clarity on what the future relationship will look like.

“Now the reality for this Tory (Conservative) government is beginning to bite, but if things do not improve, the reality may soon begin to bite for the jobs and living standards of the people of this country,” said Jeremy Corbyn, leader of the opposition Labour Party.

A report that aerospace manufacturer BAE Systems is planning to cut more than 1,000 jobs did little to ease those concerns that without progress in the talks, firms will start to make staffing and relocation decisions.

EU negotiators say that while they see no big breakthrough at the summit next week, they may offer May a hand by offering hope of a shift at the next scheduled meeting in mid-December.

Aides to May have signalled that the prime minister has accepted that her October deadline will not be met despite a speech in Italy last month which attempted to reset the tone of the difficult negotiations.

Her spokesman told reporters: “Let’s see what happens in the next round of talks”.

But some pro-Brexit campaigners are calling on the prime minister to get ready to step away from the talks – underlining the deep divisions in the Conservative Party.

Those differences were aired again on Monday with negative briefings in the local media against finance minister Philip Hammond, who supports prolonging the status quo with the EU for as long as possible, and foreign minister Boris Johnson, who angered some Conservatives for setting his own Brexit red lines.

Some have suggested that May will reshuffle her cabinet, but her spokesman said she had full confidence in both ministers.

“We are fast reaching the point when the prime minister should assert the authority of her office over the negotiations and call time,” Bernard Jenkin, a Conservative lawmaker, wrote in the Guardian newspaper.

John Baron, another pro-Brexit campaigner, called on the government to “prepare more thoroughly for a ‘no deal'”.

“I have long believed that the EU Commission primarily wants to punish Britain for daring to leave the organisation,” he said. “We should have no fears about a ‘no deal’ scenario.”


U.S. Pressure on North Korea’s Global Ties Bears Fruit

October 9, 2017

Campaign to close Pyongyang’s embassies and curb its business activities world-wide has led more than 20 nations to restrict operations

WASHINGTON—Over 20 nations have curbed the diplomatic or business operations of the North Korean government following a more-than-yearlong effort by the State Department, an indication of the kind of behind-the-scenes pressure the U.S. is using to tackle an emerging nuclear standoff.

U.S. officials have asked countries to shut down businesses owned by the North Korean government, remove North Korean vessels from ship registries, end flights by the country’s national air carrier and expel its ambassadors. At the Association of Southeast Asian Nations summit earlier this year, U.S. diplomats made sure North Korea couldn’t secure any bilateral meetings.

Mexico, Peru, Spain and Kuwait all expelled their North Korean ambassadors after the U.S. warned that Pyongyang was using its embassies to ship contraband and possibly weapons components in diplomatic pouches and earn currency for the regime. Italy became the latest country to do so on Oct. 1.

Kuwait and Qatar, among other countries, have agreed to reduce the presence of North Korean guest workers, according to U.S. officials and people familiar with the matter.

The campaign abroad is intensifying as the Trump administration adopts stricter sanctions at home, and the United Nations pursues enforcement of its tightest sanctions on Pyongyang yet. The talks are also a contrast to the heated exchanges between North Korean leader Kim Jong Un and Mr. Trump, who has issued a series of vague threats of possible military action, saying diplomacy has failed.


  • Kim Jong Un Defends Nuclear Program

The latest threat came in a Twitter message Saturday from the president. “Sorry, but only one thing will work,” Mr. Trump wrote. On Thursday, he said a White House meeting with military leaders represented “the calm before the storm.” The White House refused to clarify either remark.

Asked on Sunday what the president meant in his Twitter message, White House budget director Mick Mulvaney said on NBC that what Mr. Trump “is clearly telegraphing—and this should not be news to anybody—is that military options are on the table with North Korea. They absolutely are.”

Sen. Ron Johnson (R., Wis.), by contrast, said diplomacy was the only option for curtailing North Korea’s nuclear program. He said the U.S. should encourage China to step up pressure on Pyongyang.

“There is no viable military option. It’d be horrific,”’ Mr. Johnson, chairman of the Senate’s homeland security committee, said on CNN.

The previous weekend, Mr. Trump tweeted that Secretary of State Rex Tillerson was “wasting his time” by exploring the possibility of negotiations with North Korea. Mr. Tillerson days later held an unusual, unscheduled news conference to deny reports that he had considered resigning.

This photo released on Sunday, a day after it was taken, by North Korea’s official Korean Central News Agency (KCNA) shows the nation’s leader, Kim Jong Un, center, at the Second Plenum of the 7th Central Committee of the Workers’ Party of Korea (WPK) in Pyongyang. Photo: KCNA/Agence France-Presse/Getty Images

The U.S. diplomats, pursuing a quieter campaign alongside U.N. sanctions and talks with China, have been approaching nations as big as Germany and as small as Fiji with highly specific requests, sometimes based on U.S. intelligence, to shut down North Korea’s foreign links.

For example, a U.S. official said, the State Department flagged a North Korean hostel operating in the center of Berlin that they said was sending currency back to the Kim regime. In May, Germany announced it was closing the hostel.

U.S. diplomats asked Fiji to inform the U.N. that as many as 12 North Korean vessels were operating under the Fijian flag without permission, according to a State Department spokesman.

The idea, according to U.S. officials, is to show Mr. Kim that, so long as he seeks missiles capable of carrying nuclear warheads, he will find no refuge from Washington’s pursuit.

U.S. policy makers, led by Mr. Tillerson, have said they hope that Mr. Kim eventually will conclude his program comes at too high a cost to his regime and his nation a nd enter disarmament talks.

The likelihood of success has become a matter of debate. The U.S. intelligence community has concluded that no amount of pressure would convince Mr. Kim to disarm because the North Korean leader sees the nuclear and missile program as his regime’s ticket to survival, Senate Foreign Relations Committee Chairman Bob Corker, a Tennessee Republican, said at a recent hearing.

“Tillerson’s working against—I applaud what he’s done, but he’s working against the unified view of our intelligence agencies, which say there’s no amount of pressure that can be put on them to stop,” Mr. Corker said.

Susan Thornton, the State Department’s top diplomat overseeing the pressure campaign, said at the hearing that the department’s efforts were testing the intelligence community’s assessment and added China’s position was slowly shifting, viewing North Korea as more of a liability than an asset. “I think Secretary Tillerson has made a lot of progress on that front,” she said.

Rep. Ed Royce (R., Calif.), House Foreign Affairs Committee chairman, has said that new pressure tactics need time to work, but that North Korea eventually will lack the resources to run its missile program.

Sen. Brian Schatz, a Hawaii Democrat, shared Sen. Corker’s skepticism at the recent hearing. “You’re all, in your own way, doing that which is strategically necessary in your own lane; and yet we have an objective that may not be achievable at all.”

Many U.S. officials believe Washington must pursue a pressure campaign, even if it ultimately fails, because it represents the best chance of a peaceful solution. The White House has said it backs State Department efforts to squeeze Pyongyang, while opposing negotiations.

The pressure campaign has become a cornerstone of Mr. Tillerson’s policy on North Korea. He often requests that his staff provide him with “specific asks” he can make on North Korea when meeting with counterparts from around the world, according to U.S. officials. Mr. Tillerson has made those requests in nearly all bilateral meetings in recent months and has received weekly updates on the results.

Mr. Tillerson has elevated the campaign, which began in early 2016 after the Obama administration saw Mr. Kim make a significant advance in his drive for an intercontinental nuclear weapon, according to current and former U.S. officials.

State Department officials then drew up a detailed spreadsheet that listed all of North Korea’s known political, economic and military interests around the world—diplomatic missions, cargo ships, guest worker contingents, military relationships and more, a former U.S. official said. The document functioned as a “to do” list of entities to target for closure.

The U.S. diplomats began coordinating on roughly a weekly basis with South Korea and on a monthly basis with Japan, mapping out a strategy and comparing notes, according to the former official.

Initially, the U.S. diplomats faced resistance. Some countries, particularly in Southeast Asia, expressed skepticism about the American requests and saw little need to curtail their links with Pyongyang, current and former U.S. officials said.

But as North Korea exhibited increasingly flagrant behavior this year—assassinating Mr. Kim’s half-brother in the Kuala Lumpur airport, firing its first intercontinental ballistic missiles and testing what many U.S. officials suspect was its first hydrogen bomb—countries that had previously resisted became more cooperative, the officials said.

Myanmar, which U.S. diplomats have been pushing to cut military-to-military ties with North Korea and stop weapons deals with Pyongyang, has resisted the U.S. entreaty.

Kyaw Zeya, permanent secretary for Myanmar’s Ministry of Foreign Affairs, said the country had ordinary ties with North Korea and no special military ties. Myanmar has responded to the U.S. entreaties by asking Washington for evidence of any military dealings, the permanent secretary said.

Similarly, Chile said it has declined to reclassify its wine as a luxury export or to cut diplomatic relations with North Korea, despite personal requests made by Vice President Mike Pence on a recent trip to the country.

—Myo Myo contributed to this article.

Write to Paul Sonne at and Felicia Schwartz at

U.S., Korean Officials Agree to Amend Trade Deal Trump Disparaged

October 5, 2017

Administration had considered exiting from the agreement; neither side specified what changes would be sought

U.S. Trade Representative Robert Lighthizer speaking during a news conference in August in Washington.
U.S. Trade Representative Robert Lighthizer speaking during a news conference in August in Washington. PHOTO: JACQUELYN MARTIN/ASSOCIATED PRESS

The top U.S. and Korean trade officials agreed Wednesday on a path to make changes to the countries’ trade agreement, a five-year-old pact that has been a target of criticism from President Donald Trump.

U.S. trade representative Robert Lighthizer and Korean Trade Minister Kim​ Hyun-chong met in Washington and began a process to amend the agreement, known as the U.S.-Korea Free Trade Agreement, which lowered tariffs between the two countries and set commercial rules of the road. Neither side specified what changes would be sought to the pact, known as Korus.

“I now look forward to intensified engagement with Korea in an expeditious manner to resolve outstanding implementation issues as well as to engage soon on amendments that will lead to fair, reciprocal trade,” Mr. Lighthizer said in a statement.

“As a result of the discussions, both sides shared an understanding of the need to amend the free-trade agreement to further strengthen the mutual benefits,” Korea’s trade ministry said in a statement.

South Korea plans to take appropriate legal steps necessary for initiating the negotiations to amend the trade deal, which should include an economic feasibility study, public hearings and reports to parliament, the statement said.

Business groups that back the trade pact are likely to be reassured by Wednesday’s developments, as the first meeting between Messrs. Lighthizer and Kim went poorly, according to people familiar with the matter.

The Trump administration recently considered taking steps to exit from the trade pact, but those deliberations coincided with North Korean missile tests. Some administration officials, citing the strategic relationship with Seoul, pushed to remain in the pact. Days later, Mr. Lighthizer said he wanted to seek some changes.

The Trump administration is eager to take steps to adjust the trade deal to tackle the U.S.’s trade deficit with South Korea, which is largely driven by the country’s exports of cars and cellphones. Officials also want to make sure Seoul is implementing the agreement as planned.

Meanwhile, the U.S. trade deficit in goods with South Korea is falling. In the first seven months of 2017, the U.S. imported $13.1 billion more than it exported to South Korea, compared with a deficit of $18.8 billion in the same period a year earlier.

The Trump administration met significant resistance when considering withdrawing from the agreement with South Korea, a U.S. military ally, at the same time that it was seeking to put pressure on North Korea over its nuclear ambitions. Mr. Trump has also considered exiting the North American Free Trade Agreement, and Mr. Lighthizer is in the middle of negotiations to overhaul that deal.

Washington and Seoul are planning to use the agreement’s special “joint committee” process to change the deal rather than starting from scratch with a complete renegotiation, as in Nafta.

The Korea trade pact has a group of staunch defenders in Congress, including lawmakers involved in foreign policy or military issues on the Korean Peninsula as well as representatives of agricultural states. The U.S. exported $1.5 billion in meat products to South Korea last year and $876 million in corn.

“It’s just very, very important that we can maintain these good markets that we have overseas with South Korea, with Mexico, with Canada—with Nafta,” Sen. Deb Fischer, a Nebraska Republican, said Tuesday.

She said she has written to Mr. Trump about the Korea agreement. “I encourage the administration to keep those markets open for us so we can have strong trade,” she said.

Ms. Fisher, the chairwoman of a Senate panel that oversees U.S. strategic forces, said she recently met Korea’s trade minister in Washington and discussed trade as well as the strategic alliance with South Korea.

Still, the agreement is less popular among some U.S. industries that say South Korea hasn’t lived up to the spirit of the agreement.

Write to William Mauldin at and Kwanwoo Jun at

Appeared in the October 5, 2017, print edition as ‘U.S., Seoul To Work on Trade Pact.’

Tillerson in China to talk North Korea

September 30, 2017


© POOL/AFP / by Dave Clark | US Secretary of State Rex Tillerson shakes hands with Chinese Foreign Minister Wang Yi before a meeting at the Great Hall of the People in Beijing

BEIJING (AFP) – US Secretary of State Rex Tillerson met with China’s foreign minister in Beijing on Saturday to discuss efforts to curb North Korea’s nuclear ambitions and prepare President Donald Trump’s November visit.Tillerson, whose arrival was delayed due to technical problems with his plane in Tokyo, was greeted by Foreign Minister Wang Yi at the Great Hall of the People at Tiananmen Square.

Tillerson told Wang that he looked forward to an exchange “on issues important to us and in particular to begin the important work to prepare for the upcoming visit of President Trump.”

He did not mention North Korea in his brief remarks before reporters were ushered out of the room. Tillerson was scheduled to meet later with President Xi Jinping after talks with top diplomat Yang Jiechi.

Tillerson had been due to arrive on Friday evening but his aircraft’s problems forced him to travel to China on a military transport plane on Saturday.

The visit comes as relations between the two superpowers appear to be improving after months of tensions over how to handle North Korean leader Kim Jong-Un’s nuclear provocations.

Trump has repeatedly urged Xi to exert more economic pressure on Pyongyang to convince the renegade regime to give up its nuclear ambitions.

China, North Korea’s main trade partner, has responded by backing a slew of new United Nations sanctions.

For its part, Beijing has insisted that the sanctions must be coupled with efforts to organise peace talks, but Trump and Kim have traded increasingly personal insults that have raised fears that the crisis could spark a conflict.

“There appear to be two trains of thought in the international community regarding denuclearization of the peninsula: Crush North Korea or talk to North Korea so as to increase its sense of security. China and Russia hold the latter view,” China’s state-run Global Times newspaper said in an editorial.

– China applies sanctions –

The acting US assistant secretary for East Asia, Susan Thornton, told sceptical US lawmakers ahead of Tillerson’s trip that China appears to be on board with the plan to squeeze Pyongyang.

“We are working closely with China to execute this strategy and are clear-eyed in viewing the progress — growing, if uneven — that China has made on this front,” she said.

“We have recently seen Chinese authorities take additional actions,” she said, referring to new controls on the cross-border trade and finance that is North Korea’s economic lifeline.

On Thursday, China said it was ordering North Korean firms on its territory to close by January.

The announcement came days after China confirmed it will limit exports of refined petroleum products to North Korea from October 1 while banning imports of textiles from its neighbour.

The measures were in accordance with UN sanctions that were approved earlier in September after North Korea detonated its sixth and most powerful nuclear bomb — a test that triggered an earthquake felt across the border in China.

Trump’s November trip will be part of a tour that will also take in regional allies Japan and South Korea.

by Dave Clark