MNI: UK Davis Sees Chance Of Earlier Transition Deal

-Says Parliament May Not Vote On Final Deal Until After March 2019

By Kieran Williams

     LONDON (MNI) - David Davis has said that parliament may not get a vote on

the Brexit deal until after the UK has left the EU but talked up the possibility

of an earlier agreement on a transition deal in evidence to a parliamentary

committee.

     Appearing before the House of Commons' Exiting the EU Committee the Brexit

Secretary employed the logic that these types of negotiations with the EU often

leave decisions until the very last minute, and parliament cannot vote on a

non-existent deal. 

     "It is our intent and expectation that we will bring it to the British

Parliament before it goes to the European Parliament" said Davis.

     "It's no secret that the way the union makes its decision tends to be at

the 59th minute of the 11th hour of the 11th day and so on, and that is

precisely what I would expect to happen," said Davis. 

     When asked to clarify that the vote could come after March 29 2019, the end

of the two year Article 50 EU exit process, he responded that "it can't come

before we have the deal."

     This is likely to anger MP's who demand to have final say on the deal. The

desire for this vote is broad and these comments will incense both sides of the

aisle.

     Speaking on the implementation period Davis was more optimistic than his EU

counterpart Michel Barnier and said he thought the "form of the implementation

period" could be agreed before the end of Q1 2018.

     It was unlikely, however, to come before the EU Leaders summit in December

where leaders will assess whether the UK has made 'sufficient progress' to

advance to phase two of the talks.

     On the timing of a trade deal and implementation period Davis echoed

sentiments of both Prime Minister Theresa May and Chancellor Philip Hammond that

a Brexit trade deal won't be known in detail until 2019. Davis, however, said

that the outline of a transitional deal could be agreed sooner once it was clear

the type of trade agreement that was on the table.

     This will reassure businesses who warned that contingency plans would have

to be implemented early next year if there was no clarity on the transitional

deal, a move which CityUK posit could put up to 75,000 jobs in financial

services alone at risk. Firms will also be encouraged by Davis saying he

envisages City firms having passporting rights to operate in the EU.

     Davis defended preparations for a Brexit 'no deal' scenario but noted that

it was not the governments preferred option. He said this was one of the UK's

most important negotiating chips and that without this possibility, the EU "has

you over a barrel." 

     Davis adduced the example of Greece and said it was a danger that the EU

could impose "sudden last-minute claims" that could threaten a deal.

     Earlier in the testimony Davis had emphasised that this was a negotiation,

saying that the EU originally wanted around E100 billion, but if the UK had

accepted this figure they would have asked for more. 

     While there has been increased rhetoric around a 'no deal' outcome, it is

becoming increasingly clear that the government views this solely as a tool for

the negotiations. Davis said he saw the likelihood of a pure no deal Brexit as

off the probability scale.

     Asked about money and the so called 'divorce bill', Davis said he accepted

that the proposed E20 billion settlement was only around 1% of GDP and thus was

outweighed by the potential benefits of a good trade deal. He caveated this

though, saying the government should not pay more than it should and agreed with

the Chancellor on this point.

     As usual Davis sounded upbeat about the negotiations, though his

perceptions are often vastly different from his opposite number in the EU.

Markets will closely watch testimony to the same committee by Barnier in two

weeks' time.

--MNI London Bureau; +44 203 865 3809; email: kieran.williams@marketnews.com

--MNI London Bureau; tel: +44 203-586-2223; email: david.robinson@marketnews.com

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