Lord Green, 29 March marked the first step of Britain’s departure from the EU: Prime Minister Theresa May formally kicked-off the two-year process to exit the European Union. Was this a historic event?
In my opinion it was. It represents a new departure for the country that is the most significant one since 1949 when NATO was established. Since the referendum and our government’s commitment to abide by it, a lot of work and thinking was done about the implications of all this in public and within the business community. During the referendum campaign nobody had any real idea of what the decision to leave would actually mean in practice. Today, we have reached a point where the government has tabled the letter and set the priorities for the new relationship with the EU and Britain's new place in the world. We now face a two-year period of the Article 50 negotiations and most likely continued discussions, since a lot of details will need to be sorted out, particularly in trade.
What next steps can we expect?
The government has made it clearer that it does not expect to be a member of the Single Market or remain within the common external tariff. Those are pretty clear positions. Britain will seek to negotiate a deep and comprehensive free trade agreement with the EU. The EU has not yet formally responded but Chief EU negotiator Michel Barnier has made it clear that the two high-priority items that everybody will want to deal with first are: budgetary responsibilities and sorting out the position of EU citizens in the UK and British citizens in the EU.
The media have used the analogy of a divorce. What’s your take on this?
Obviously, Britain leaving the EU as second largest member state is a major event and it will have implications for reflection within the EU about its future course, but the divorce isn’t a very helpful analogy. What we need to think about are the shared interests of Britain and the EU going forward, and those are extensive. With over 40% of British exports going to the EU, Britain is a major trading partner and will continue to be so. But not only trade is a connection, there are so many common areas of activities that will be affected, such as the ERASMUS program, common research projects, security questions, air space management, and so on. The British government will be preoccupied with this for the next two years and probably much longer.
Listen to a podcast extract from the interview with Lord Green as to why Brexit has not come out of the blue.
Are there any specific agreements already in the works?
Conversations have begun with a number of priority countries but there won't be any complete deals before the Article 50 discussions with the EU are sorted out. Until then, Britain remains legally a member of the EU and therefore cannot sign any trade agreements. In addition, no trading partner is likely to sign a deep and comprehensive free trade agreement until it knows precisely what the arrangements will be between Britain and the EU.
What outcomes do you see for trade relations with Switzerland in particular?
I would hope that an open Britain will remain as interested in growing trade both ways and of course in mutual investment. There has been a long-standing tradition of being an open investment destination, which I certainly don’t see changing at all. On the contrary, the government will bend over backwards to score the importance of that. So you should expect that the core strategy of the British government would be to be an open trading partner and an open investment opportunity.
Furthermore, I think that Britain will be looking to the Swiss as partners (podcast interview).
What do you think Britain’s negotiating position will be with the EU?
Britain is the world’s sixth largest economy and an important partner on all sorts of levels with the EU. Therefore Britain won't see itself in a weak position when entering the negotiations but rather on an equal basis with the EU.
What we should all hope for is that discussions are going to be constructive. A lose-lose situation would be an overall mood to punish Britain or each side trying to score points off each other. This clearly would not be in anybody’s interest. The British will seek a constructive and mutually beneficial set of agreements with the EU. Because one thing is for sure: the geography doesn’t change. Britain remains part of Europe and is inevitably engaged in European affairs. And for that to prosper, we need a good framework.
You will be speaking at the Asia Leaders Series event in Zurich. We heard a lot about the Rising Middle Class in Asia, we ourselves are expanding our presence with a Swiss Business Hub in Jakarta, Indonesia. Which opportunities do you see for exporting Swiss SMEs?
The rise of the Asian markets will continue. There have been comments on the apparent slowing of the Chinese rate of growth but it slowed down to 6.5%, which, by European standards, is still extremely rapid. India is doing well and ASEAN offers a common trading block involving over 600 million people. These are enormous opportunities for the Swiss, the British or other Europeans, and they will be there for the next generation or two.
The government does see a new opportunity for Britain to negotiate free trade agreements with China, Japan, India, South Korea and some ASEAN countries. And it does believe that the flexibility gained by being a single member negotiating instead of 28 member states, as is the case in the EU, will enable Britain to sign attractive free trade deals.
S-GE members benefit: Register now for the Asia Leaders Series event 12 April in Zurich
Lord Stephen Green, former UK Minister of State for Trade and currently Chairman of the Asia House in London, will be speaking at the Asia Leaders Series event on April 12 in Zurich about Britain’s future relationship with Europe and the rise of Asia. S-GE members benefit from a 30% discount! Register now here.
From the heart of Europe, Zurich, the Asia Leaders Series provides a crucial intersection between the East and the West, where visionary leaders meet, build trust, and move the world forward. Click here for more information upcoming events this year.