Brussels has warned Boris Johnson that it will never grant the UK an extensive trade deal if Britain insists on diverging from EU standards, teeing up a clash that will define the coming months of future relationship negotiations.
Almost three days after the UK formally left the EU on Friday last week, both sides are anxious to lay out their initial positions on the mammoth trade talks ahead with the clock ticking down to the end of the Brexit transition period on December 31.
Michel Barnier, the EU’s chief Brexit negotiator, said that Britain had to decide if it wanted to “continue to adhere to [the] EU social and regulatory model in future” or “seek to diverge”.
“The UK answer will be fundamental to the level of ambition of our future relationship and the UK must know this,” he said. He insisted the UK could not claim to be surprised by the EU’s demands, adding: “It will be up to the UK to decide.”
Mr Barnier was speaking just before a speech by Mr Johnson in which the UK prime minister set out his vision of a “Canada-style” relationship with the bloc that would break free from EU rules.
Brussels’ draft mandate for the future relationship talks, published on Monday, calls on the UK to continue to “ensure the application” of EU state-aid rules in the UK. Britain would also be required to stay in line with EU environmental and labour market rules as they stand at the end of Britain’s post-Brexit transition period.
In exchange, the EU would be prepared to offer the UK what it describes as a “highly ambitious” trade deal including tariff-free, quota-free trade in goods. The EU is also prepared to strike an ambitious free trade agreement on services, covering a wide range of sectors including business and telecoms.
The UK argues that the EU’s level playing field demands are entirely unjustified. In his speech at the Old Royal Naval College in Greenwich, south London, Mr Johnson rejected any alignment with EU rules.
“There is no need in a free trade deal to accept EU rules on competition, subsidies or environment,” Mr Johnson said.
The level playing field is one of several core EU demands set out by Mr Barnier that cross UK red lines.
Brussels insists that the European Court of Justice must have a role in settling any disputes that arise in the future relationship over how to interpret EU law. Mr Johnson signed up to this in a political declaration he agreed as part of the UK’s withdrawal treaty with EU leaders last year, but he is expected on Monday to reject any role for the ECJ.
Mr Barnier said that the ECJ role was essential to future EU-UK security co-operation, notably when it comes to sharing sensitive personal data.
The EU is also demanding access for its fishing industry to UK waters on a similar basis as to now. Mr Barnier said that this issue was “inextricably” linked to the trade talks.
Mr Barnier said that the EU’s entire approach adhered closely to a political declaration on future relations to which Mr Johnson agreed with the union’s leaders last year.
Brussels is bracing for some of the most difficult talks it has ever held with another country, given that only 11 months remain to hammer out an agreement before the UK’s post-Brexit transition period expires. National governments are set to adopt the mandate later this month, finalising the bloc’s negotiating stance.
Senior EU figures such as European Commission president Ursula von der Leyen have already said that it will be impossible to have the entire future relationship settled by the end of this year, and that a second phase of talks will be needed in 2021.
Mr Barnier said that a trade deal could be settled this year if “there is sufficient will and sense on both sides”, but he warned that life after the transition period would inevitably be very different.
“We will have two separate markets instead of one single market,” he said, noting that “customs formalities”, as well as “certification and market authorisation” requirements would apply.
“Businesses must adapt now — now — to this new reality,” he said.
Source: Economy - ft.com
