British finance minister Philip Hammond said on Saturday morning it is likely Britain will want to negotiate a bespoke arrangement for a future trade deal with the European Union, rather than copying existing arrangements like the Canada-EU deal.
The European Union agreed on Friday to move Brexit talks onto trade and a transition pact but some leaders cautioned that the final year of divorce negotiations before Britain's exit could be fraught with peril.
Summit chair Donald Tusk said the world's biggest trading bloc would begin "exploratory contacts" with Britain on what London wants in a future trade relationship, as well as starting discussion on the immediate post-Brexit transition.
Speaking in Beijing, Mr Hammond it was probably not helpful to think in terms of off-the-shelf models like the Canada-EU deal.
“We have a level of trade and commercial integration with the EU 27 which is unlike the situation of any trade partner that the EU has ever done a trade deal with before,” he told reporters.
“And therefore it is likely that we will want to negotiate specific arrangements, bespoke arrangements,” Mr Hammond added.
"So I expect that we will develop something that is neither the Canada model nor an EEA model, but something which draws on the strength of our existing relationship."
The Brexit negotiations have been a vexed issue for the global economy as markets feared prolonged uncertainty would hit global trade and growth.
A transition period is now seen as crucial for investors and businesses who worry that a “cliff-edge” Brexit would disrupt trade flows and sow chaos through financial markets.
Mr Hammond's China visit is the latest instalment in long-running economic talks between the two states but it has now taken on new importance for Britain as it looks to re-invent itself as a global trading nation after leaving the EU in 2019.
China is one of the countries Britain hopes to sign a free trade agreement with once it leaves the EU, and London and Beijing have been keen to show that Britain’s withdrawal from the bloc will not affect ties.
Mr Hammond sought to offer reassurance to Chinese firms post-March 2019 when Britain formally leaves the EU.
“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’ve made this week to creating an environment which will effectively replicate the current status quo,” he said.
Addressing the press after Hammond had spoken, Chinese vice finance minister Shi Yaobin said China hopes Britain and the EU can reach a win-win agreement. - Reuters