Nissan Warns On Deal Doubts as Talks Go to Wire: Brexit Update

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03 febr. 2019, 10.31

(Bloomberg) -- U.K. Prime Minister Theresa May insists she’s “determined” to deliver Brexit “on time,” on March 29, despite ministers in her own Cabinet suggesting a delay could be needed. She promised to return to Brussels with renewed commitment and “new ideas” to deliver a deal.

Key Developments:

  • Treasury secretary Liz Truss says it’s “inevitable” that Brexit talks will go to the last minute (10:25 a.m.)s
  • Nissan scraps plan to make new model in U.K., warning of Brexit uncertainty (12:12 p.m.)
  • May says even Jeremy Corbyn agrees the Brexit backstop needs changes
  • Fox: EU leaders being “irresponsible” to rule out Irish backstop changes (9:25 a.m.)
  • Euroskeptic Tory Steve Baker warns of “trouble ahead” with May’s deal facing defeat

Brexit Doubts as Nissan Drops U.K. Plan (12:12 p.m.)

Nissan Motor Co. is scrapping plans to make the next-generation X-Trail car at its plant in Sunderland, northeast England and will instead manufacture the model in Japan. The decision, confirmed by the company on Sunday, is a blow to a region that voted heavily to leave the EU in the 2016 referendum.

Nissan Europe Chairman Gianluca de Ficchy said the continuing doubts over the U.K.’s trading relationship with the EU are making life harder for businesses like his. “We appreciate this will be disappointing for our U.K. team and partners,” he said. “While we have taken this decision for business reasons, the continued uncertainty around the U.K.’s future relationship with the EU is not helping companies like ours to plan for the future.”

Javid: Technology Exists to Replace Backstop (10:00 a.m.)

Home Secretary Sajid Javid said there is no need for the Irish border backstop plan. He’s spoken to Border Force officials in his department who told him existing technology could be deployed to avoid a hard border on the island of Ireland.

That’s a big clash with Javid’s pro-EU Cabinet colleague, Business Secretary Greg Clark who said last week that technical solutions were not “currently available.” He also declared his total opposition to staying in a customs union with the EU. Speaking to the BBC’s Andrew Marr show:

  • Javid said there will be a “change” to Britain’s security capabilities -- and not a positive one -- if the country leaves with no deal. “I’m absolutely confident that we will continue to be one of the safest countries in the world,” he insisted.
  • Javid said the public won’t forgive the government for calling an early election, which is "the last thing" Britain needs.
  • He said Brexit Secretary Steve Barclay is leading work on finding an alternative arrangement to the backstop, while Attorney General Geoffrey Cox is looking for an exit mechanism or a time limit to the backstop plan.

Truss: Brexit Talks Will Go to the Wire (10:25 a.m.)

Chief Secretary to the Treasury Liz Truss said it was “inevitable” that the Brexit negotiations will go to the last minute -- and that means Britain can’t back down on its threat to leave with no deal.

“I’m afraid it’s inevitable that in these types of negotiations things do get decided close to the last minute -- that’s when the maximum political pressure is,” Truss told BBC Radio 5 Live. The “threat of no deal on both sides” is bringing Parliament closer to a consensus and will also “get the EU on board,” she said. “I think we are seeing signs of the EU’s position softening.”

But even if there is no deal, truck movements, data exchange and financial services transactions will continue, Truss said, adding that predictions of “Armageddon scenarios” are exaggerated.

The Treasury minister was also asked about reports that Nissan is going to cancel plans to make the X-Trail model in the U.K. She described the reports as “speculation.”

Liam Fox Attacks ‘Irresponsible’ EU leaders (9:25 a.m.)

U.K. International Trade Secretary Liam Fox said EU leaders are being “irresponsible” to rule out even talking about potential changes to the withdrawal agreement -- because a no-deal Brexit would hit the European and British economies.

“Are they really saying they would rather not negotiate and end up in a no-deal position?” Fox told the ‘Sophy Ridge on Sunday’ show on Sky News. “For the EU to say, we’re not going to even discuss it seems to me quite irresponsible.” Fox added that Ireland will pay a price by refusing to engage in negotiations: namely a no-deal Brexit and a hard border.

A staunch Brexit supporter, Fox reiterated his opposition to staying in a customs union with the EU when asked if he would accept this as the price for getting a deal through Parliament. He wouldn’t say whether he could quit the Cabinet in protest, if a customs union becomes official policy.

He also repeated his earlier suggestion that extra time beyond the March 29 deadline could be needed to implement a deal, but he warned the EU is unlikely to agree to an open ended delay to Brexit.

May Says She Won’t Delay Brexit (earlier)

“I’m determined to deliver Brexit, and determined to deliver on time – on March 29, 2019,” the prime minister wrote in an article in The Sunday Telegraph newspaper.

It’s an important line because in recent days a succession of senior ministers raised the prospect that Brexit Day could be delayed. These include Liam Fox, the pro-Brexit international trade secretary -- who first flagged a potential delay in an interview with Bloomberg.

On Thursday, Foreign Secretary Jeremy Hunt suggested extra time might be required to get all the necessary laws through Parliament before the U.K. exits the bloc. May has canceled Parliament’s February vacation to make more time available for action on bills. So far, she says that should be enough and is sticking to next month’s withdrawal deadline.

Steve Baker, the influential MP who helps coordinate the European Research Group of pro-Brexit Tories, had a warning for May on Sunday. He suggested she’s backsliding on her commitment to scrap the Irish border backstop plan -- and his colleagues will vote down her deal if she does.

Earlier:

U.K. PM’s Office Denies Report on June 6 Polls, Reuters SaysNissan to Cancel Plans to Make X-Trail Model in U.K.: Sky

--With assistance from Anchalee Worrachate.

To contact the reporter on this story: Tim Ross in London at tross54@bloomberg.net

To contact the editors responsible for this story: Flavia Krause-Jackson at fjackson@bloomberg.net, Steve Geimann

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