Friday

28th Jul 2017

Barnier sets price for hard Brexit

  • "There is no sense in making the consequences of Brexit even worse," said Michel Barnier, the EU's Brexit negotiator. (Photo: European Commission)

No customs union between the UK and the EU will be possible if the UK does not want to respect single market rules, and a failure to reach a divorce deal would send the UK back to "a distant past", the EU's Brexit negotiator has warned.

"There is no reasonable justification for the ‘no deal’ scenario. There is no sense in making the consequences of Brexit even worse," Michel Barnier said on Thursday (6 July).

He said that a no deal scenario would mean "very cumbersome procedures and controls, without facilitation, which would be particularly damaging for companies that operate on a ‘just-in-time’ basis".

He pointed out that under World Trade Organization (WTO) rules, there would be customs duties of "almost 10 percent on vehicle imports, an average of 19 percent for alcoholic beverages, and an average of 12 percent on lamb and fish," adding that the EU is the UK's biggest export market for these products.

He also said that British manufacturers that export to the EU would face increased transport costs because they would have to keep their products in stock for 3 or 4 days instead of a few hours, and rent warehouse space.

"In practice, ‘no deal’ would worsen the ‘lose-lose’ situation which is bound to result from Brexit. And the UK would have more to lose than its partners," Barnier insisted.

The French politician was speaking to businesses, trade unions and civil society representatives at the European Economic and Social Committee in Brussels, said he was still "not sure" whether consequences of Brexit "have been fully understood across the Channel."

Ten days before the first week-long round of talks, which will start on 17 July in Brussels, the EU negotiator laid out the almost inextricable situation faced by the UK government.

'Not possible'

"I have heard some people in the UK argue that one can leave the single market and keep all of its benefits - that is not possible," he said.

He added that leaving "the single market and [building] a customs union to achieve 'frictionless trade'" is also "not possible."

Barnier explained that a "frictionless trade" would only be possible with "the combination of the customs union and the rules of the internal market".

But by leaving the EU, he added, the UK will "move to the other side of the external border that delineates not only the customs union but also the area in which the rules of the internal market are adopted."

Barnier also warned that, contrary to the hopes of some Brexit supporters in the UK, "there can be no sector by sector participation in the single market," for instance for the automobile industry or financial services.

"You cannot be half-in and half-out of the single market," he said.

Echoing German chancellor Angela Merkel, the EU negotiator stressed that the "most important" issue for the EU is not Brexit but "the future of Europe".

'Time flies'

He also insisted that his job was to "limit the cost of Brexit for the 27 as much as possible."

That would leave the UK with no option other than making "rapid and sufficient progress" on the three priorities set by the EU: citizens’ rights, the financial settlement and the Irish border issue.

Amid talks in British media that UK prime minister Theresa May would be ready to walk out of talks on the financial settlement - the money the UK will have to pay as part of its EU commitments - Barnier insisted that progress will be needed on the three issues "together", before talks on future relations can start.

Barnier said that everyone should stay "calm" and without "any aggressiveness or arrogance".

As negotiations will start more than three months after May triggered the 2-year negotiating period, Barnier also warned that "time flies" until 29 March 2019, when Brexit will happen automatically.

"The real transition period began on 29 March 2017, the day on which the UK presented its notification letter," he said, referring to the Article 50 notification to leave the EU.

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