Isle of Man News - POSTED Tue 16-05-2017

Potential impact of Brexit ‘significant and long-lasting’

by LC

The potential of Brexit to affect the future of the Isle of Man has been highlighted in Tynwald today by Chief Minister Howard Quayle MHK.

Mr Quayle underlined the importance of the issue when he moved a resolution noting the ongoing work of the Council of Ministers on the implications of Brexit for the Island.

The Chief Minister told Members: ‘The implications of the United Kingdom’s withdrawal from the European Union have the potential to be significant and long-lasting for our Island.

‘For over forty years our relationship with the European Union has been set out in Protocol 3 to the UK’s Treaty of Accession. Through this we are included in the EU Customs Union and in the Single Market for free trade in goods.

‘But when the UK leaves the EU on the 30th of March 2019 Protocol 3 will fall away and our existing relationship will end.’

Mr Quayle said it was now clear that the UK would not be part of the Single Market and that it would leave the Customs Union, so Protocol 3 could not be replicated. The Government was working with the private sector to assess key risks and opportunities.

He explained: ‘Broadly speaking the risks will be centred on the potential introduction of tariffs or non-tariff barriers when trading in agricultural and manufactured goods. In other words trading with the EU will not be as easy in the future.

‘In addition freedom of movement of people between the UK and the European Union is likely to be restricted or reduced. This may make life more difficult for people who live in the Isle of Man but who originally come from outside the UK, and for our people living in the European Union. It could also mean access to labour is more difficult or costly.

‘The main opportunities are likely to be commercial. New markets may open up for us, particularly in our stronger sectors like financial services or e-business. But this increased market access is unlikely to be in the EU and may potentially be further afield.’

The Chief Minister said if there was no UK/EU Free Trade Agreement in place World Trade Organisation (WTO) schedules would apply to the UK’s trade with Europe as well as with other WTO members. As the UK’s membership of the WTO included the Isle of Man those schedules would also apply to the Island.

‘These schedules will therefore determine not only the UK’s - but also the Island’s – external tariffs on Brexit day. This is because we are in customs union with the UK and therefore our external tariffs must be consistent with theirs.

‘So we must ensure that we have the right legal and administrative framework in place to give effect to these external tariffs.’

In addition to the WTO issue, explained Mr Quayle, the Government was also assessing how the Isle of Man could be included in future Free Trade Agreements that the UK may negotiate with the EU and with other countries.

Describing this as ‘another complex area both technically and politically’ he said it was important to remember that a Free Trade Agreement could be viewed as a form of contract with rights and obligations.

The Chief Minister cautioned: ‘We cannot expect to gain the right to free trade without having to meet certain obligations. It is not clear what these obligations may be but this will become clearer as the negotiations between the UK and the EU progress and the content and shape of any Free Trade Agreement between them emerges.’

The Chief Minister’s full speech is available on the special Brexit section of the Isle of Man Government website:

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