BBC News:It takes two to tango over Brexit, Hammond tells EU


The EU's "relative silence" about the kind of post-Brexit relations it wants with the UK must end, Philip Hammond is to tell German business leaders.

There is "little, if any signal" from the EU about its priorities for talks on future co-operation due to begin in March, the chancellor is claiming.

"They say it takes two to tango," he will say in in Berlin. "Both sides need to be clear about what they want."

The EU has warned the UK cannot cherry-pick the kind of arrangement it wants.

The second phase of Brexit negotiations, covering transitional arrangements after the UK leaves in March 2019 and future economic and security co-operation, are set to begin officially in March.

But they insist the EU's desire to protect the integrity of the single market for its other 27 members is "not inconsistent" with the UK's desire for the most comprehensive agreement possible.

"It makes no sense to either Germany or Britain to put in place unnecessary barriers to trade in goods and services that would only damage businesses and economic growth on both sides of the Channel," they write.

"So as Brexit talks now turn to trade, the UK will look to negotiate a new economic partnership with the EU - the most ambitious in the world - that recognises the extraordinary levels of interconnectedness and co-operation that already exist between us.

"We should use the imagination and ingenuity that our two countries and the EU have shown in the past, to craft a bespoke solution."

The UK's preferred model for a post-Brexit deal is what Mr Davis has desCRIbed as Canada plus, plus, plus - a reference to Canada's low-tariff free trade deal with the EU but with services included as well as goods.

The two men make clear in the article that unrestricted trade in services - which makes up about 80% of the UK economy - will be pivotal to any successful deal, as will financial and regulatory co-operation within Europe.

The EU's chief negotiator, Michel Barnier, has warned the UK it cannot hope to get a special deal for the City of London and that its options have narrowed as a result of it turning its back on the single market.

UK-based banks and financial firms are worried they will lose the passporting rights that allow them to trade freely in the EU after Brexit - an outcome that is likely to see firms moving jobs to the continent.

Separately, International Trade Secretary Liam Fox has urged Conservative backbenchers to not view everything through the "prism of Brexit", says BBC political correspondent Iain Watson.

Dr Fox told the 1922 Committee of backbench Tory MPs on Wednesday to focus on the "bigger picture", pointing to an increase in UK manufacturing orders and expectations that the economy will grow in the next quarter.

He said there was a political danger in suggesting events were "because of" or "despite" Brexit because the government could lose credit for the economic recovery - that it would not "own" the recovery.

He is also believed to have told his Conservative colleagues that Labour remained in a state of confusion on Brexit and that some of their voting record on the withdrawal bill could be used as a weapon against them in key constituencies.

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