Britain's Hammond calls for strong trade bonds with EU post-Brexit

Philip Hammond, Britain's Chancellor of the Exchequer, made a case Friday at the World Economic Forum here for strong trade relationships between Britain and the European Union (EU) after Brexit.

"It's very much in the interests of the UK and the European Union that we continue to have free trade," Hammond said during a panel on the global financial outlook for 2017.

Free trade between Britain and the EU was necessary so that the "complex supply chains that have built up over 40 years can continue to operate and the complex business relationships can continue to operate. We don't want to see those trade patterns disrupted, we want to see them able to continue."

In his plea for openness between the two sides, he acknowledged there were conflicting points of view on the freedom of movement of goods, services, capital and people, protected within the EU as the foundation of the single market and that Britain needed to respect the European political imperative.

"So we have pitched our proposal not at membership of the market," Hammond stressed, "but at a comprehensive free trade agreement between an independent United Kingdom outside the European Union, and the European Union."

He said that under the trade agreement, the EU would likely remain Britain's largest trade partner. "It is in our vital national interest that our single largest trade partner is confident, successful, stable and growing," he said, adding that a stable euro was also in London's best interests.

Hammond's hopes seemed to be supported by others, as fellow panel member Wolfgang Schauble, German finance minister, said he was convinced that post-Brexit, London would remain an important financial center for Europe.

Likewise, chief executive officer of British bank Barclays, Jes Staley, said that London's position as the center for global capital markets wouldn't be affected by a few banks shifting jobs during the Brexit process.

For his part, Hammond made it clear that Britain would find its way, regardless of the outcomes of the Brexit negotiations.

"The UK economy has been resilient in 2016 confounding many skeptics who believed we would face an immediate and negative response in the economy," he declared. "In fact, we ended 2016 as the fastest growing of the large developed economies."

He pointed out that with the currency depreciation of the pound, Britain was being seen by many international investors as a buying opportunity.

Still, Britain had a strong preference to stay competitive by remaining within the European economic mainstream, continuing to operate according to European norms and regulatory standards, in order to offer reciprocal market access to European partners.

"If we are denied access to our most important market, then we will for sure reinvent ourselves and create another way of being competitive," Hammond warned. Endit