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EU not happy with UK’s approach to trade deals

No to “pick and mix”

Donald Tusk, the European Council President, has said that the UK’s approach to a trade deal cannot get the go ahead. He commented that it was not in the EU’s interest to accept the UK’s “pick and mix” approach. While the EU has presented their own guidelines to a trade deal, Tusk pointed out that although he understands and respects Theresa May’s objectives, the objectives of the EU were different.

Donald Tusk, the European Council President;

“No member state is free to pick only those sectors of the single market it likes, nor to accept the role of the ECJ only when it suits their interest. By the same token, a pick-and-mix approach for a non-member state is out of the question.”

Following the UK’s Prime Minister’s speech regarding UK trade with the EU after Brexit and the UK’s wish to leave the single market, customs union and the jurisdiction of the ECJ (European court of justice) Tusk remarked that “it should come as no surprise that the only remaining possible model is a free trade agreement… I hope that it will be ambitious and advanced – and we will do our best, as we did with other partners, such as Canada recently – but anyway it will only be a trade agreement.”

EU guidelines

The EU’s trade guidelines have outlined that the UK, upon signing up to a free trade agreement, will have to sign up to a commitment whereby they do not become a low-tax, low-regulation state. To do so would undercut the EU.

The EU will not continue with negotiations until Theresa May signs up to a legal text that translates all commitments made by the UK government during the first phase of negotiations. However, the UK’s Prime Minister has refused to accept the EU’s draft withdrawal agreement as it suggests Northern Ireland may need to effectively stay in the customs union and single market.

“This is the essence of Brexit”

The EU has highlighted the potential negative effects of Brexit on the UK, saying that the UK’s red lines “limit the depth of such a future partnership” and has warned that “this, unfortunately, will have negative economic consequences”. Tusk said: “Our agreement will not make trade between the UK and the EU frictionless or smoother. It will make it more complicated and costly than today, for all of us. This is the essence of Brexit.”

Associate membership declined

The EU has declined the UK’s request to have associated membership of its agencies.

The EU document says: “The European Council further reiterates that the union will preserve its autonomy as regards its decision-making, which excludes the participation of the United Kingdom as a third-country to EU institutions, agencies or bodies”.

What the EU wants
  • Zero-tariff trade in goods.
  • Limited access to services as the UK will no longer share a common regulatory and judiciary framework.
  • No “cherry-picking” of participation in the single market for particular sectors of industry.
  • Reciprocal fishing rights for EU vessels in UK waters should continue.
  • Continued security and research cooperation and to ensure flights were not grounded.
  • The EU will “preserve its autonomy as regards its decision-making, which excludes the participation of the United Kingdom as a third-country to EU Institutions, agencies or bodies”.
What the UK wants
  • A bespoke trade deal, rather than an “off-the-shelf” model.
  • “The fact is that every free trade agreement has varying market access depending on the respective interests of the countries involved.” Theresa May.
  • “We will also want to explore with the EU, the terms on which the UK could remain part of EU agencies.”
What happens next?

The leaders of the 27 EU states will have to agree upon the plans on 22nd March at a summit in Brussels. Only then can the EU and the UK begin to set out the rules for their future relationship.

With the UK due to leave the EU in late March 2019, both sides have said they would like a deal on their future relationship to be finalised by this autumn.

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