LONDON, July 12 (Xinhua) -- Britain's proposals unveiled on Thursday afternoon for a Brexit deal that allows reciprocal special access for financial services with the European Union (EU) is unlikely to appeal to negotiators from the trade bloc, an expert said.
Prime Minister Theresa May revealed the 98-page White Paper on Thursday lunchtime, the product of an agreement reached with her Cabinet last week.
May's White Paper offers proposals on trade, movement of people, access to markets and legal jurisdiction for the ongoing Brexit negotiations.
May has offered to adopt the EU rules on movement of goods, which would ease fears over trade in goods and protect the resilience of complex cross-border supply chains.
But in the areas of financial services, where London and the British financial sector is by far the pre-eminent center within the current EU, May and her government have proposed a special deal between Britain and the EU.
Britain's proposals would see both the EU and British financial services regulations given an enhanced equivalence in each jurisdiction.
UNLIKELY
These government proposals were seen as unlikely to appeal to the EU by Jonathan Portes, senior fellow for the UK in a Changing Europe think-tank.
"The chances of this being accepted are relatively small and we are going to see something that looks a lot more like the current equivalence regime," he told Xinhua.
The EU currently recognizes the regulations in the financial sector of third party countries, such as the United States, as having equivalence with its own regulations, allowing businesses to operate more easily.
However Britain wants more secure and improved access to EU markets after Brexit to ease the loss of the current frictionless access it has a member state.
Portes told Xinhua in an interview: "The British government has recognized that their will not be passporting of rights, and Britain will not be part of the single market in financial services."
"Equally the government has said it regards the current equivalence rules, which the EU can repeal unilaterally whenever it feels like, as unacceptable."
"It does not provide the certainty businesses would need to continue here or to set up in Britain."
"What the British have asked for is a much deeper form of equivalence which it would be very much harder for the EU to take away."
An enhanced equivalence regime would see British regulatory changes recognized as equal by the EU, which Portes felt was unlikely to appeal.
Portes argued that the EU "may make some minor changes to the current regime but the EU has said this works for the U.S. so we don't see why... we shouldn't do the same for Britain."
ROLE OF CENTRAL BANK
The British White Paper proposals preserve and extend the current role of the central bank the Bank of England (BoE) as a markets regulator.
The BoE currently has one of the broadest and far-reaching set of responsibilities for market regulation of any of the globe's central banks.
This is a significant change from the position that the British Treasury, the finance ministry, had taken earlier, when it could have given the BoE a less equivalent role compared to EU regulators.
Portes said: "The Treasury has moved its position. The Treasury has accepted that the sort of relationship that we have now is not really a winner. Like everything in the White Paper it is a half-baked fudge and compromise."
He added: "From the Bank's point of view it looks like the best possible outcome. The Bank will be pleased with where the government has ended up -- but it is not clear to me at all whether the EU will buy this."
