Monday

18th Dec 2017

No 'frictionless trade' with EU after Brexit, says Malmstroem

  • EU trade commissioner Malmstroem said the UK will not be able to roll over EU trade deals after Brexit (Photo: European Commission)

EU trade commissioner Cecilia Malmstroem warned Tuesday (5 December) that there "cannot be 100-percent frictionless trade" with the UK after it leaves the EU and the bloc's single market.

The "most frictionless trade possible" is precisely what the UK government argued for in August in its position paper on a future comprehensive free trade agreement with the EU.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

"Now we have a country leaving us and the single market, and it will not have the advantages of the single market," Malmstroem told an audience in Brussels.

"It cannot be 100-percent frictionless trade, because they are not in the single market," she added.

Malmstroem pointed out that the EU will have to treat the UK as a third country after March 2019 when Britain leaves the bloc.

Without a trade deal, the UK will have to rely on World Trade Organisation rules, tariffs and quotas.

No roll-over

Malmstroem also said the UK will have to leave EU trade deals once it leaves the bloc.

Existing EU free trade deals, such as with Canada, will not be applicable to the UK, the trade commissioner said.

"When they [UK] leave the EU, they leave the trade agreements," she said.

When asked how the UK should deal with this situation, Malmstroem said "That's their problem."

The commissioner added that she did not think it was possible to "roll over" existing EU trade agreements for the UK.

She said as a third country after March 2019, the UK will have to leave such EU free trade agreements as the one with Canada, South Korea, or the ones under discussion now and possibly concluded by Brexit, for instance with the Mercosur countries (Argentina, Brazil, Paraguay and Uruguay).

EU leaders will decide at a summit next week if Brexit negotiations could enter their second phase that focuses on future relations and the framework of a trade agreement, plus a transition period.

Once the summit has given the green light, Malmstroem said that EU leaders will "have to tell us what to do".

The EU's trade officials could start preparing for a free trade agreement between the EU and UK, and scoping what would be included in a possible future deal.

EU sources said member states in their preliminary discussions focused on working out a free trade agreement with the UK along the lines of the trade deal with Canada (Ceta).

British prime minister Theresa May said in September in her Florence speech that neither the Ceta, nor an European Economic Area membership (for instance as applicable for Norway) is what the UK is looking for post-Brexit.

"Instead let us be creative as well as practical in designing an ambitious economic partnership which respects the freedoms and principles of the EU, and the wishes of the British people," May said.

The prime minister said then there is "no need to impose tariffs".

"We will do everything we can to avoid friction at the border," she added.

UK wants EU trade deal before resolving Irish border

The UK insists an EU trade deal must first be delivered before any final decision can be made on the Irish border issue. The EU demands 'sufficient progress' on the border before any trade deal.

Trade talks could only start post-Brexit

Substantive negotiations on an EU-UK free trade deal would only start once Brexit is a reality. The main issue could be how much the UK would want to retain elements of the single market, and what the EU agrees to.

EU begins preparations for Brexit trade talks

The EU has launched internal preparations for phase two of Brexit talks, but a December breakthrough only possible if UK gives more detail on divorce issues first.

EU commission changes gear on trade

The EU executive seeks new deals with Australia and New Zealand, while aiming to overhaul the global investment protection system. It also wants to screen foreign investments.

EU sets Brexit 'deadline of deadlines'

The EU will not have enough time to prepare for launching the second phase of Brexit talks at the summit next week, if the UK government does not come to an agreement on the divorce soon.

Brexit: EU trade talks to start in April

Talks on future trade relations to start mid-April, as Brussels waits for London to say what sort of relationship it wants, but last week's deal now 'Davis-proofed'.

News in Brief

  1. EU adopts 'track-and-trace' tobacco system
  2. Luxembourg appeals Amazon tax decision
  3. EU leaders agree to open phase 2 of Brexit talks
  4. Juncker: May made 'big efforts' on Brexit
  5. Merkel took 'tough' line on Russia at EU summit
  6. EU leaders added line supporting 'two-state' solution
  7. EU leaders agree to 20 European Universities by 2024
  8. Belgian courts end legal proceedings against Puigdemont

Stakeholders' Highlights

  1. Dialogue PlatformThe Gülen Community: Who to Believe - Politicians or Actions?" by Thomas Michel
  2. Plastics Recyclers Europe65% plastics recycling rate attainable by 2025 new study shows
  3. European Heart NetworkCommissioner Andriukaitis' Address to EHN on the Occasion of Its 25th Anniversary
  4. ACCACFOs Risk Losing Relevance If They Do Not Embrace Technology
  5. UNICEFMake the Digital World Safer for Children & Increase Access for the Most Disadvantaged
  6. European Jewish CongressWelcomes Recognition of Jerusalem as the Capital of Israel and Calls on EU States to Follow Suit
  7. Mission of China to the EUChina and EU Boost Innovation Cooperation Under Horizon 2020
  8. European Gaming & Betting AssociationJuncker’s "Political" Commission Leaves Gambling Reforms to the Court
  9. AJC Transatlantic InstituteAJC Applauds U.S. Recognition of Jerusalem as Israel’s Capital City
  10. EU2017EEEU Telecom Ministers Reached an Agreement on the 5G Roadmap
  11. European Friends of ArmeniaEU-Armenia Relations in the CEPA Era: What's Next?
  12. Mission of China to the EU16+1 Cooperation Injects New Vigour Into China-EU Ties

Latest News

  1. Catalonia, Brexit, and Uber on EU agenda This WEEK
  2. Macron and Merkel take tough line on Poland
  3. Eurozone future needs structural reforms, EU leaders told
  4. Showdown EU vote on asylum looking likely for next June
  5. EU stresses unity as it launches next phase of Brexit talks
  6. Polish PM ready for EU sanctions scrap
  7. Dutchman to lead powerful euro working group
  8. EU mulls post-Brexit balance of euro and non-eurozone states