Hangzhou, China - Theresa May’s first summit as British prime minister gave her a taste of just how difficult it will be to satisfy voters at home and governments abroad in Brexit negotiations.
While May closed the Group of 20 meeting in Hangzhou, China, talking of Britain being a leader on global free trade, Shinzo Abe demanded more certainty for Japanese companies operating in the UK. That followed Barack Obama reiterating a trade pact isn’t a priority for the US and reminders from Europeans that withdrawal will come at a price.
Back in London, those who led the campaign to leave the European Union criticised May’s rejection of a points-based system to curb immigration. Meanwhile, Polish officials prepared to travel to Britain to discuss the safety of their citizens following an increase in violence against foreigners.
The criticism from all angles marks a reality check for May as Britain’s Parliament reconvenes amid signals she will face mounting demands to start outlining and defending her plans for pulling out of the EU. She reiterated there is no intention to start formal talks before next year.
‘Obviously impatient’
“The international audience is obviously impatient and focused on the economy, but the main challenge for her domestically remains immigration,” said Carsten Nickel, an analyst for Teneo Intelligence in Brussels. “The pressure, for now, is bearable.”
May rejected the public barbs, saying there was a willingness among G-20 counterparts to discuss striking trade deals. As for determining access to the UK on the basis of points for qualifications and skills, she recalled how Heathrow airport staff told her and her predecessor, David Cameron, about how migrants abusing student-visa rules were automatically let in because they met the criteria.
“That’s the problem with a points-based system,” she said. “I want a system where the government is able to decide who comes into the country. I think that’s what the British people want.”
This was all before talks with her host, Xi Jinping, under the shadow of her refusal to commit to the Hinkley Point nuclear plant, in which China plans to invest. “I have been clear that a decision about Hinkley will be taken later this month, but our relationship with China is about more than Hinkley,” May said.
Hinkley Point
Hinkley Point wasn’t raised specifically during the half-hour meeting, an official from May’s office told reporters. But Xi recognises that the new UK government will need time to review decisions and has the patience to await a resolution. Xi also told May that China would be open to a bilateral trade deal, and it was announced that May will visit China next year.
Days after his government released a 15-page paper setting out the threats to Japanese companies in Britain if exit terms are too tough, Abe told May in person that investment in her country is partly dependent on Britain’s access to the single market.
By the end of 2014, Japan had investments in the UK valued at 38 billion pounds ($51 billion) with Nissan Motor and Nomura Holdings both having British operations.
“Prime Minister Abe requested her co-operation to enhance predictability and to continue to secure Japanese companies’ businesses and value chains,” Japan’s Ministry of Foreign Affairs said in a statement.
No deal
Meanwhile, at his final G-20 summit, Obama expressed hope that international business relations don’t “unravel” because of Brexit as he again poured water on any hope of an imminent trade deal with the US.
Away from the G-20, Italy’s Economic Development Minister Carlo Calenda told Bloomberg Television at the Ambrosetti Forum in Cernobbio, Italy, that the UK needs to hurry up and decide how to exit. European Commission Vice President Valdis Dombrovskis and Austrian Chancellor Christian Kern said the UK would not be able to pick and choose the terms of divorce.
On the upside, Australian Prime Minister Malcolm Turnbull said his government is keen to clinch a trade accord as soon as the UK quits the EU. Another round of data also showed the UK economy rebounding from the shock of the referendum result with a gauge of services jumping the most on record in August.
‘Serious backsliding’
In a sign of how May will have multiple constituencies to appease, former UK Independence Party leader Nigel Farage accused the prime minister of “serious backsliding”.
“Her comments rejecting an Australian-style points system really worry me,” said Farage. “Those of us on the Leave side were perfectly clear in campaigning for strong border controls outside of the EU.”
Polish Foreign Minister Witold Waszczykowski is to visit the UK along with two colleagues after a Pole was beaten to death in Harlow, north of London, on August 27 and two Polish nationals were assaulted” in the same town on September 4. Police are investigating the incidents as potential hate crimes amid an escalation of anti-foreigner sentiment following the Brexit vote.
“Are the police following procedures, increasing patrols in Polish neighbourhoods and can they identify who’s threatening the Poles?” Waszczykowski said, when asked what the delegation will discuss in London.
BLOOMBERG