UK seeks common subsidy rules, information-sharing in post-Brexit competition regime

18 July 2018 3:10pm

12 July 2018. By Lewis Crofts and Michael Acton.

The UK wants a new kind of competition relationship with the EU that goes beyond the terms of normal trade deals, according to a government wish-list for a post-Brexit trade deal with Europe.

The White Paper envisages a “common rulebook” on state aid, as well as provisions for information sharing in competition probes.

Unveiled today, the paper seeks reciprocal commitments with the EU on competition policy that “go beyond those usually made in Free Trade Agreements.”

“The UK would make an upfront commitment to maintain a common rulebook with the EU on state aid, enforced by the Competition and Markets Authority,” the paper reads, adding scant new detail on previous policy statements.

The aim of the rulebook is to minimize the disruption that could arise from divergences in state-aid rules.

But the White Paper adds some caveats, noting that such an arrangement must not “prejudice the UK’s intention to develop new tailored arrangements in relation to payments to farmers,” as well as the UK’s future public-procurement policy.

And while the EU pursues controversial cases against governments offering tax sweeteners into the likes of Apple, Ikea and McDonald’s, the paper asserts that the UK’s proposal “would not fetter its sovereign discretion on tax, including to set direct or indirect tax rates.”

The move by the UK government to broadly align with EU state-aid rules is designed to ease fears in Brussels that the UK could in future become a haven for international corporations seeking a more relaxed state-aid regime. Prohibiting any abuse of state aid is also an essential precondition of any future trade deal between the UK and the EU.

The two sides have already provisionally agreed that the UK will remain subject to EU competition rules for a 21-month transition period after the UK leaves the bloc in March 2019.

In terms of future competition policy, the UK wants to establish cooperative arrangements with EU regulators, as the UK’s own authority starts to pursue parallel investigations to EU competition authorities.

“This should include provisions on sharing confidential information and working together on live cases”, the paper reads.

The White Paper does not provide much detail on how the proposed system would work in practice, or when it could become operational.

But officials at the CMA have previously suggested that such an arrangement could mirror that reached between the EU and Switzerland in 2013.

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