Wednesday

1st Feb 2023

EU and UK already lock horns over post-Brexit EU rules

  • EU chief negotiator Michel Barnier with the trade negotiation process on a slide behind him (Photo: European Commission)

Only three days after Brexit, the EU and the UK clashed over the next phase of negotiations on the future trade deal, as London and Brussels set out different views on their new relationship.

The EU's chief negotiator Michel Barnier said on Monday (3 February) that a "highly ambitious" trade deal is on offer by the EU, if the UK agrees to tough rules preventing unfair competition.

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Barnier said "it will be up to the UK to decide" if they want to take advantage of such a trade deal or diverge from EU standards and rules.

Barnier rolled out the EU commission's plan for the talks (which still has to be adopted by member states at a meeting on 25 February), as British prime minister Boris Johnson a few hours later said the UK will not adhere to EU rules.

"Competition is normal, but because of our geographic proximity, and economic interdependence, this exceptional offer is conditional," Barnier said.

The EU is looking for "specific and effective guarantees on level playing field over the long term", meaning upholding high standards on social, environmental, climate, tax, and state aid rules and their future changes.

Barnier said Johnson has already agreed to prevent "unfair competitive advantages" in the political declaration which was part of the divorce deal.

"We now have to address the consequences of the choices the UK has made," Barnier said.

He said the bloc isn't looking for "alignment" to EU rules, because it is a "red rag for the UK", but "consistency" from the UK.

The French politician also warned that there will be checks for the goods even though the EU aims for a zero-tariff, zero-quota trade deal.

The EU also wants a role for the European Court of Justice (ECJ) in the future deal, in disputes over the interpretation of EU law. Barnier also said the ECJ will need to have a role in new security cooperation, especially on personal data.

The UK has signed up to this in the political declaration under the divorce deal, but on Monday Johnson he rejected the role of the ECJ, which has been one of the key reasons for Brexiteers to want to leave the bloc.

The UK prime minister, however, said he wants to see a "Canada-style" relationship with the EU that would break free from its rules. But he also pledged not to undercut EU standards.

The EU-Canada removed tariffs on 98 percent of goods, increased tariff-free quotas, and opened up public procurement tenders.

"There is no need for a free trade agreement to involve accepting EU rules on competition policy, subsidies, social protection, the environment, or anything similar," Johnson said in a speech on Monday.

He ruled out any regulatory alignment, any jurisdiction for the ECJ over UK's laws, or "any supranational control in any area, including the UK's borders and immigration policy".

In fact, some member states want to go even further than the commission's proposed negotiating mandate. France, for instance, would want the UK to follow EU rules when they are strengthen or updated, an EU source said.

Meanwhile, central European countries want to focus on state aid rules.

Clock ticking

Johnson, contrary to the EU, would prefer a set of agreements instead of one, broad deal.

The EU plans to have one horizontal deal on how to manage the relationship (including dispute resolution), and economy and security relations, featuring as the two main pillars of the agreement.

The EU commission's idea is that other sectors can be added later - as there are less than 11 months to sort out the framework deal before the transition period ends at the end of 2020.

A deal would have to be found by the end of October to give enough time for legal clarifications, translations and ratification.

EU officials warn that this will not be sufficient time to conclude the deal, but Johnson has ruled out requesting an extension to the transition period - which he would have to do by the end of June.

An agreement on fishing, access to waters and share of fish, will have to be negotiated in parallel, and concluded by the summer, in time for the EU to decide on its internal share.

Barnier suggested the deal on fish will be prerequisite for the broader trade deal, saying the issue is "inextricably" linked to the trade talks.

EU officials are also hoping that national and regional parliaments will not have to be involved in the ratification process, on the EU side.

EU officials and some member states are dreading a possible repetition of Belgium's Wallonia almost derailing the EU-Canada free trade deal in 2016.

Legally, the commission is planning an association agreement with the UK. It is hoping that since there would be more EU-only content than national content in any such deal, national and regional parliaments would not need to ratify it.

March start

The new round of talks come after three-and-a-half year gruelling, and sometimes bad-tempered, negotiations between the EU and UK, often saved by last-minute breakthroughs and fudges.

Talks on the future relations could start early March. It will include 10-12 "tables", parallel strands of negotiations on different sectors, conducted in Brussels and London.

On Monday, the British pound fell by around one percent after Johnson set out his tough terms - renewing fears that the EU and UK would not reach a trade agreement by the end of the year.

"The best relationship with the EU is when you are a member, when you are not a member, your position is less favourable," Barnier commented.

EU won't accept UK trade deal 'at any price', Barnier warns

Talks on the future EU-UK trade deal will start next Monday - but tensions are already high over the EU's efforts to stop the UK undercutting the bloc's standards and London's wobbling position on Northern Ireland.

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