The U.K. government published its first detailed strategy for exiting the European Union, with plans indicating a desire to maintain close ties with the bloc for its manufacturing sector while seeking a looser, more transient arrangement for Britain's much-larger services industry.
The so-called White Paper, published Thursday in London and presented to parliament by new Brexit Secretary Dominic Rabb, also maintains several U.K. commitments on spending and rule share in place across sectors such as civil aviation and medicines and human rights, but stops short of conceding on the free movement of citizens between Britain and the bloc, a decision that likely means officials in Brussels will reject the approach as a violation of the "four freedoms" -- the movement of goods, services, capital and people -- throughout the single market.
"We approach these negotiations with a spirit of pragmatism, compromise and, indeed, friendship, I hope, I trust that the EU will engage with our proposals in the same spirit," Rabb told lawmakers in London Thursday. "Now, it is time for the EU to respond in kind."
The pound, which was traded weaker against the U.S. dollar for much of the early session in London, was marked modestly higher at 1.3221 following the release of the White Paper and Rabb's statement to parliament.
Pound treading water after the government's release of the #Brexit White Paper. Still a lot of unanswered questions but key to #GBP's short-term direction of travel is the EU's assessment of May's plan. Two broad outcomes:— Viraj Patel (@VPatelFX) July 12, 2018
"Workable" = #GBPUSD 1.33-1.34
"Unworkable" = <1.30 pic.twitter.com/jF8qO9wAAS
Britain has until March 31, 2019 to either exit the European Union completely, and trade with the bloc under WTO rules, or come to an agreement that satisfies both the EU's "four freedoms" demand from Brussels and the "take back control" mantra of British lawmakers that won the Brexit referendum in 2016.
Speaking in Brussels at the conclusion of the two-day NATO summit in the Belgian capital, May said the White Paper is proof that the government is"delivering on the vote of the British people to take back control of our money, our laws and our borders."
We've published our White Paper. Setting out how we will secure the best #DealForBritainJuly 12, 2018
Others within her own party, however, appeared to disagree. Jacob Rees-Mogg, a relatively unknown backbench MP prior to the referendum, but who has since emerged as one of the leading voices for the Leave movement, said Thursday that the plans were "the greatest vassalage since King John paid homage to Phillip II at Le Goulet in 1200. This White paper has not needed age to turn yellow."
Business lobbyists, too, appeared underwhelmed by May's compromise, hammered out last week at the Prime Minister's country retreat, Chequers, which triggered the resignation of two key lawmakers earlier this week and could, in the month ahead, result in a leadership challenge or the collapse of her fragile coalition government.
"This White Paper puts some vital meat on the bones of the Chequers plan," Britain's Institute of Directors said in a statement. "But the biggest question mark looms over what will replace freedom of movement."
"The Government is right to prioritise an ambitious scheme on labour mobility with the EU, but businesses need to work from concrete proposals. We would urge the Government to bring forward its plans for post-Brexit migration, which should be at the heart of our future economic partnership with Europe."
Even President Donald Trump appeared unenthusiastic about Britain's new Brexit tack when asked by members of the media at his NATO press conference earlier today.
"I've been reading a lot about Brexit over the past couple of days, and it seems to be turning a little bit differently to where they're getting at least partially involved back with the European Union." he said. "But I have no message ... it's not for me to say what they should be doing in the U.K."