In a keynote speech in London on Friday, Mrs May ruled out a post-Brexit customs union with the EU because Britain wanted to be free to strike trade deals with nations around the world.But she said a deal with the bloc that maintains existing standards of regulation should be possible – a deal that “supports each other’s interests”.

Customs union ruled out

She added, “While the means may change, our shared goals surely have not – to work together to grow our economies and keep our people safe.” Previously, Mrs May has spoken of achieving a deal that could result in continued “frictionless trade” between the two sides. But, after talks in Downing Street on Thursday, Donald Tusk, president of the European Council, appeared to rule this out, commenting, “Friction is an inevitable side-effect of Brexit by nature.”  On the European Commission proposal that, to avoid a ‘hard border’ on the island of Ireland, Ulster should remain in the customs union and single market – a move that would effectively create a border down the middle of the Irish Sea – Mrs May said she was determined to preserve the UK’s “union of nations”.She said, “Our departure from the EU causes very particular challenges for Northern Ireland, and for Ireland. We joined the EU together 45 years ago. It is not surprising that our decision to leave has caused anxiety and a desire for concrete solutions. 

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Related stories:

• EU proposal on Irish border rejected by British
• EU migration to UK plummets amid Brexit fears
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“We chose to leave; we have a responsibility to help find a solution. But we can’t do it on our own. It is for all of us to work together.”Mrs May maintained the UK should still be able to agree a “bold and comprehensive economic partnership” with the EU. “What I am seeking is a relationship that goes beyond the transactional to one where we support each other’s interests,” she said.“So I want the broadest and deepest possible agreement – covering more sectors and co-operating more fully than any free trade agreement anywhere in the world today.“I believe that is achievable because it is in the EU’s interests as well as ours and because of our unique starting point, where on day one we both have the same laws and rules.“So rather than having to bring two different systems closer together, the task will be to manage the relationship once we are two separate legal systems.”Mrs May set out “five tests” that would determine the UK’s approach to the next phase of Brexit negotiations. They were: respecting the outcome of the referendum by taking “control of our borders, laws and money”; an agreement that would endure without the need for continuing negotiations; the mutual protection of jobs and security; consistency with Britain remaining “a modern, open, outward-looking, tolerant, European democracy”; and deal that strengthens “our union of nations and our union of people”.

Migrants right to stay

Her speech came after it emerged that the UK has conceded to demands from Brussels that EU migrants who relocate to Britain during the two-year Brexit transitional period will have the right to settle permanently. However, they will not enjoy all the rights that will be offered to the three million-plus EU nationals already in the country and will have to pass a minimum income threshold test, currently set at £18,600 per annum.In her speech, Mrs May said Brexit would mean free movement coming to an end, but added “UK citizens will still want to work and study in EU countries – just as EU citizens will want to do the same here”. She said companies “must be able to attract and employ the people they need”.The prime minister also undertook that the UK would make a “strong commitment that its regulatory standards will remain as high as the EU’s” to ensure the smooth trade in goods. “That commitment, in practice, will mean that UK and EU regulatory standards will remain substantially similar in the future,” she added.“Our default is that UK law may not necessarily be identical to EU law, but it should achieve the same outcomes. In some cases, parliament might choose to pass an identical law – businesses who export to the EU tell us that it is strongly in their interest to have a single set of regulatory standards that mean they can sell into the UK and EU markets.“If the parliament of the day decided not to achieve the same outcomes as EU law, it would be in the knowledge that there may be consequences for our market access.”Mrs May also said she wanted to explore how the UK could remain part of the European Medicines Agency, the European Chemicals Agency, and the European Aviation Safety Agency after Brexit.“We would, of course, accept that this would mean abiding by the rules of those agencies and making an appropriate financial contribution,” she said.“Associate membership of these agencies is the only way to meet our objective of ensuring that these products only need to undergo one series of approvals, in one country.“Second, these agencies have a critical role in setting and enforcing relevant rules. And if we were able to negotiate associate membership we would be able to ensure that we could continue to provide our technical expertise.“Third, associate membership could permit UK firms to resolve certain challenges related to the agencies through UK courts, rather than the European Court of Justice.” 

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Read more about the UK industry in the Winter issue of our magazine 

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