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Analysis

EU says no good trade deal without ‘level playing field’

by John Wyles | 20.11.2017

“The future of Europe is more important than Brexit,” said Michel Barnier today in his most significant set of remarks on the EU’s terms for achieving an amicable divorce with the UK and an “ambitious” subsequent partnership. The tone and political precision of Barnier’s speech to a Centre for European Reform conference in Brussels says much about the EU’s increasing frustration at the British approach to the negotiations.

The future of Europe is not one that Barnier and the European Commission will allow to be shaped by the terms of Brexit. The EU has its rules, Barnier stressed yet again today, and they are not going to be bent and cherry-picked for the benefit of Britain – no free passporting for financial services, for example. The Commission’s chief negotiator reminded the British that access to the single market via any trade agreement was not the same as being part of the single market.

His second message to the Brexiters is that they are wrong to think that a free trade agreement can be quickly agreed simply because Britain and the EU start with zero tariffs and common regulations. If Britain is taking back control, then the risk for Brussels is one of regulatory divergence after Brexit. Barnier stressed this was the first time trade talks had ever faced such a challenge and “this will not be easy”.

He added: “There will be no ambitious partnership without common ground in fair competition, state aid, tax dumping, food safety, social and environmental standards.” Without that, he suggested that national parliaments and the European Parliament would not ratify a deal. Insistence that we stay close to EU rules post-Brexit won’t please Brextremists. But if we don’t agree, our economy will be badly hurt.

Thirdly, mounting pressure from the Irish government requires Brussels to resist the British view that the question of an open or closed border can only be dealt with when settling the terms of a free trade agreement. This is seen as holding the Good Friday Agreement hostage in an attempt to use the border as a lever to force concessions on the trade front. Barnier asked the British to say what they will commit to avoid a hard border.

It remains the case that the key questions the other 27 countries are asking will not be answered until the battles between the Leavers and Remainers in the Conservative and Labour parties begin to be resolved.

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Edited by Hugo Dixon

One Response to “EU says no good trade deal without ‘level playing field’”

  • “EU says no good trade deal without ‘level playing field’”

    Interesting take, though it suggests that the EU must think that none of its existing trade deals, bar, arguably, Switzerland, is any good.

    There is no harmonisation between Korean and EU labour laws, for example, and yet the EU-Korean FTA has been very beneficial for the EU (not so for Korea).