Brexit clears first milestone with hard yards ahead

Bloomberg

The first phase of Brexit talks is done. Now comes the hard part.
UK Prime Minister Theresa May has secured agreement from the European Union to move on from discussing the divorce terms to mapping out a plan for the future trade relationship. Before that, she wants to nail down a transition deal as soon as possible.
This is the crucial bridging phase that businesses want to smooth the change in trading conditions from EU membership rules to whatever new regime applies
after Brexit.
May’s team have set out plans to abide by the rules of the EU single market and customs union during what she calls the “implementation phase” after the UK legally leaves the EU on March 29, 2019. This period, May says, will be strictly time limited and is likely to last for about two years.
The EU is offering Britain a temporary extension of the existing membership rules, without a say over how those rules operate or over any new ones that are written. On the face of it, there isn’t much to argue about. May wants a status quo transition period — and that’s what the EU is offering.
In China, Chancellor of the
Exchequer Philip Hammond on Saturday said Britain will use the time to keep relations essentially unchanged. “We won’t technically or legally be in the customs union or in the single market, but we’re committed, as a result of the agreement we made this week, to creating an environment which will effectively replicate the current status quo,” Hammond said in Beijing, where he’s on a two-day trip to meet with Chinese officials.
One potential battle during the negotiations will be role of the European Court of Justice. May says she’ll accept that it should have a role in the initial months of any transition but thinks its jurisdiction should be phased out as soon as a new dispute resolution regime is ready to take over.
What counts more than the details for May is the speed of reaching a deal. A transition period is designed in part to stop businesses quitting the UK in search of a more stable home elsewhere in Europe. Many large companies are making those decisions about where and whether to leave now.
If the transition deal isn’t agreed in the next two or three months, it will be too late to be much use, according to May’s team.
The EU seems to understand this and has indicated that transition talks will be the focus of the dialogue from now until March, when the agenda will move on to the future free-trade agreement that May wants.
Time is tight on this, too. While European Council President Donald Tusk says some exploratory talks on the future trade terms can start before March, detailed negotiations won’t begin until a year before the UK leaves the EU.
May pushed back against that, saying that trade talks will start “straight away.” A UK government official said May’s team will hold the EU to its earlier promise that discussions on the future relationship would start once the divorce issues were settled — which they now are. There’s no question of backsliding and the UK won’t let parts of the Commission use these guidelines as an excuse to freeze up the process, the official said.

Ready to Sign
Despite disbelief in Europe, May and her team still publicly insist they can complete all the trade negotiations before Brexit day and have a new trading relationship ready to sign into law the moment the country leaves the bloc.
Brexit Secretary David Davis has admitted that he’ll be in a weak position trying to negotiate a trade deal when the UK is already outside the bloc. In order to meet the March 2019 deadline, the framework of the future relationship needs to be done ideally by October, to allow the European Parliament and the increasingly assertive UK lawmakers to have time to ratify the agreement. That leaves seven months to finalise the outline of an ambitious pact.

Colony bets on Brexit boost for Dublin with $1.2bn project
Bloomberg

A Colony NorthStar Inc. venture will develop a Dublin real estate project valued at $1.2 billion as it seeks to take advantage of increased demand for Irish office space after the Brexit vote.
The New York-based real estate investor, whose chairman is billionaire Tom Barrack, will develop four office buildings at Spencer Place in the city’s docklands, Managing Director Stefan Jaeger said in an interview.
The venture with Irish developer Johnny Ronan will also develop a hotel, stores and homes on the plot, with the first
properties due for completion
in 2020.
“Even if you have very minor Brexit moves of 500 or 1,000 people from individual banks, that has a huge impact in Dublin because there currently is a shortage of space,” Jaeger said. “Dublin will be a major beneficiary and this development is in a prime position to take advantage of that.”
Demand from technology, public sector and financial firms has led to a lack of empty
properties in the Irish capital, where construction came to a halt after the country’s property bubble burst.
Dublin’s docklands district has an office vacancy rate of less than 1 percent, Jaeger said. That compares with 4.7 percent for the city centre, according to broker Jones Lang LaSalle Inc.
JPMorgan Chase & Co. acquired an office building on the opposite side of the river from Spencer Place earlier this year and Facebook Inc. and Alphabet Inc.’s Google have also been expanding in the district. Other occupiers in the area include the nation’s central bank and Citigroup Inc.