The UK cannot have a Canada-style trade deal with the EU, free from the bloc’s rules, Brussels’ chief negotiator said on Tuesday night.
The message from Michel Barnier brought an immediate response from London. Boris Johnson’s office accused the EU of reneging on an original offer in 2017.
The UK is seeking a trade deal with the EU similar to those struck by Brussels with the likes of Canada, Japan and South Korea. These agreements remove most tariffs and the countries are not obliged to stick closely to EU rules.
Michel Barnier insisted that the EU was ready to offer a good deal to the UK after the post-Brexit transition phase expires at the end of the year. But he added that Britain’s geographical position meant it could not be treated in the same way as more distant countries.
“We remain ready to offer the UK an ambitious partnership: a trade agreement that includes in particular fishing, and includes a level playing field with a country that has a very particular proximity – a unique territorial and economic closeness, which is why it can’t be compared to Canada or South Korea or Japan,” he told reporters.
The No. 10 Downing Street Press Office responded with a tweet saying that in 2017 the EU had offered a Canada-type free trade agreement (FTA) as “the only available relationship for the UK”, given Britain’s demands. “Now they say it’s not on offer after all… What’s changed?” it asked Michel Barnier.
The EU negotiator’s comments follow a speech in Brussels on Monday by Britain’s negotiator. David Frost said the UK was demanding the right to set its own laws, and rejected “any EU meddling on rules and regulations”.
He said that if the UK’s demands were not met, then it was prepared to trade on “Australia-style terms” – which effectively means under World Trade Organisation (WTO) rules with no trade deal in place.
“We are clear that we want the Canada-Free Trade Agreement-type relationship which the EU has so often said is on offer – even if the EU itself now seems to be experiencing some doubts about that, unfortunately,” Frost told an audience at Brussels’ ULB university. “If those doubts persist, we are ready to trade on Australia-style terms if we can’t agree a Canada type FTA.”
In the Brexit divorce deal, Boris Johnson’s government signed up to a "level playing field" with the EU over issues including state aid, competition, social and workers' rights, the environment and climate change.
However, this engagement is included in the Political Declaration on future EU-UK relations, which is legally non-binding – as opposed to the Withdrawal Agreement on the terms of exit which has the force of an international treaty.
Section XIV – "Level playing field for open and fair competition" – notes the "geographic proximity and economic interdependence" of the EU with the UK, demanding "robust commitments" from both sides.
The declaration provides a framework which could form the basis for a future trade agreement – but it is shaping up to be highly contentious as each side interprets its terms in different ways.
The UK left the EU on January 31. A stand-still transition period keeping most arrangements in place – which the UK has ruled out extending – runs until the end of December.
Both sides have until then to negotiate a new trade deal and the terms of their future relationship — covering a wide range of areas including security cooperation, data policy, education and science.