Tuesday

17th Jul 2018

Barnier rules out special trade deal for UK

  • Barnier said the trade deal will have to be ratified by 35 national and regional parliaments - a process which could take years (Photo: ec.europa.eu)

The chief EU negotiator for Brexit has ruled out a special trade agreement with the UK for after Brexit, crashing London's hopes for a unique arrangement.

Michel Barnier told journalists from leading European newspapers on Monday (18 December) that financial services will not be covered under the trade agreement, since it is not part of any free trade accord.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... our join as a group

"There is not a single trade agreement that is open to financial services. It doesn't exist," Barnier was quoted by the Guardian.

This means British banks and financial firms will lose the 'passports' that allow them to trade freely in the EU.

British prime minister Theresa May held her first cabinet meeting on Tuesday devoted to what sort of agreement it wants with the EU after Brexit.

EU leaders last week gave a green light to start talks on the future relations, after the terms of divorce – on citizens' rights, the Irish border and financial settlement – have been agreed.

They urged the UK to spell out the future relationship it envisages with the EU, so that negotiations on that can start after the EU summit in mid-March.

Barnier's comments pour cold water on the UK's expectations on a wide-ranging bespoke post-Brexit trade agreement that would be tailored to accommodate the UK's desire to "take back control", while keeping some benefits of EU membership.

Earlier this month the UK's Brexit minister David Davis said Britain wants a trade deal with the EU that includes the best parts of the bloc's agreements with Japan, Canada and South Korea, along with financial services.

The EU has said that since the UK wants to leave the single market and the customs union as it leaves the EU, London can only choose from a number of already existing EU arrangements, such as with Norway, or Switzerland, or a free trade deal, like the one with Canada.

A so-called 'Canada, plus, plus, plus' agreement with the EU – which Davis has called for that would include the "best elements" of the EU's trade deals with Canada and South Korea, and would include services – is not on option for the EU.

Barnier told the newspapers, the bloc could see agreements accompanying the trade deal on judicial cooperation, defence and security and aviation.

The chief negotiator also reiterated that during a limited transition period, on which negotiations due to kick off in January, the UK would have to submit to all EU rules without having a say in them.

The transition period is likely to last until the end of 2020, which would coincide with the end of the current seven-year EU budget that the UK needs to pay into.

Barnier said the UK can start negotiating its own trade deals with third countries during the transition period, but those agreements cannot come into force.

The negotiator added that those third countries would likely want to see first what agreement the UK strikes with the EU before committing themselves to any deal with Britain.

The final EU-UK trade deal could be negotiated in two years, Barnier said, but that it would have to be ratified by 35 regional and national parliaments in the EU, which could take years.

Transition

The EU commission will on Wednesday (20 December) roll out the negotiating mandate for the transition period, after the EU summit last week give the go ahead for further talks.

An EU source said it is not expected to be much more detailed than the guidelines for the negotiations adopted last week by EU leaders, which set out a limited transition period during which the UK will have to adhere to EU rules.

One of the reasons for the limited detail is that the UK has not spelled out what sort of future relationship it wants at the end of the transition period, the source added.

Analysis

What are the key points of the Brexit deal?

Here is a brief summary of the main points of the 'joint report', the outline of the Brexit divorce deal reached on Friday morning - and what still lies ahead.

EU says Brexit transition to end in December 2020

There is no 'a la carte' transition period, the chief EU Brexit negotiator said, adding that the UK will have to comply with EU rules and policies without taking part in making decisions.

EU stays calm as two top UK ministers quit

EU officials said Brexit negotiations will not be affected by the resignations of the foreign secretary and Brexit secretary. European Council president Tusk noted that "unfortunately the idea of Brexit hasn't left" with David Davis or Boris Johnson.

Opinion

Brexit - why can't we just swipe left?

The entire Brexit debate since at least 2015 has been like a bad date. But this is the age of Tinder, why can't we just swipe left?

Stakeholders' Highlights

  1. IPHRCivil society asks PACE to appoint Rapporteur to probe issue of political prisoners in Azerbaijan
  2. ACCASocial Mobility – How Can We Increase Opportunities Through Training and Education?
  3. Nordic Council of MinistersEnergy Solutions for a Greener Tomorrow
  4. UNICEFWhat Kind of Europe Do Children Want? Unicef & Eurochild Launch Survey on the Europe Kids Want
  5. Nordic Council of MinistersNordic Countries Take a Stand for Climate-Smart Energy Solutions
  6. Mission of China to the EUChina: Work Together for a Better Globalisation
  7. Nordic Council of MinistersNordics Could Be First Carbon-Negative Region in World
  8. European Federation of Allergy and AirwaysLife Is Possible for Patients with Severe Asthma
  9. PKEE - Polish Energy AssociationCommon-Sense Approach Needed for EU Energy Reform
  10. Nordic Council of MinistersNordic Region to Lead in Developing and Rolling Out 5G Network
  11. Mission of China to the EUChina-EU Economic and Trade Relations Enjoy a Bright Future
  12. ACCAEmpowering Businesses to Engage with Sustainable Finance and the SDGs

Latest News

  1. EU and Japan wave light in Trump's 'darkness'
  2. How Israel silences Palestine in EU circles
  3. Putin asks Trump to go after British activist
  4. May caves in to Brexiteer demands, risking 'no deal'
  5. EU and China agree on words, not yet on action
  6. EU is 'foe', as Trump seeks to make friends with Putin
  7. Let's not be 'naive' with Chinese partner, says senior MEP
  8. Trump, trade, and Brexit in EU headlines This WEEK

Stakeholders' Highlights

  1. Nordic Council of MinistersCooperation in Nordic Electricity Market Considered World Class Model
  2. FIFAGreen Stadiums at the 2018 Fifa World Cup
  3. Mission of China to the EUChina and EU Work Together to Promote Sustainable Development
  4. Counter BalanceEuropean Ombudsman Requests More Lending Transparency from European Investment Bank
  5. FIFARecycling at the FIFA World Cup in Russia
  6. Nordic Council of MinistersOECD Report: Gender Equality Boosts GDP Growth in Nordic Region
  7. Centre Maurits Coppieters“Peace and Reconciliation Is a Process That Takes Decades” Dr. Anthony Soares on #Brexit and Northern Ireland
  8. Mission of China to the EUMEPs Positive on China’s New Measures of Opening Up
  9. Macedonian Human Rights MovementOld White Men are Destroying Macedonia by Romanticizing Greece
  10. Counter BalanceControversial EIB-Backed Project Under Fire at European Parliament
  11. Nordic Council of MinistersIncome Inequality Increasing in Nordic Countries
  12. European Jewish CongressEU Leaders to Cease Contact with Mahmoud Abbas Until He Apologizes for Antisemitic Comments

Join EUobserver

Support quality EU news

Join us