By Ben Kerrigan-
The European Union has today rejected Theresa May’s dream of a bespoke trade deal, instead offering a no-frills free trade agreement shorn of full access for the UK’s financial sector.
The EU rebuffed Theresa May’s vision for trade after Brexit, as it set out a highly restricted view of future relations with the UK. The EU proceeded to warning of the “negative economic consequences” of her choices.
European Council president, Donald Tusk, circulated draft guidelines instructing EU negotiators to take an austere approach, with severely limited arrangements for services and regulatory co-operation. No mention of financial services is made.
“The European Council has to take into account the repeatedly stated positions of the UK, which limit the depth of such a future partnership. Being outside the customs union and the single market will inevitably lead to frictions,” the guidelines state.
“Divergence in external tariffs and internal rules as well as absence of common institutions and a shared legal system, necessitates checks and controls to uphold the integrity of the EU Single Market as well as of the UK market. This unfortunately will have negative economic consequences.”
EU leaders have always been adamant the UK could not cherry-pick the rights of the single market it finds most suitable. The document was expected to offer Britain more flexibility, partially reversing a hard Brexit in future. EU chiefs are prepared to present more palatable conditions on the condition the UK drops some of its red lines including plans to terminate the jurisdiction of the European Court of Justice, and stop free movement. Meanwhile, those conditions are not viable since they contradict the very essence of Brexit.
A draft resolution of the European Parliament called for measures to curtail Mrs May’s proposal that Britain could adopt different regulations in some areas. The document calls for “as close as possible a partnership with the UK” going beyond trade and economic policy. However, the bloc warns in the text that trade talks will not take place until the UK gives further assurances on outstanding issues such as citizens’ rights, the Northern Irish border and a post-Brexit transition phase.
“Negotiations can only progress as long as all commitments undertaken so far are respected in full,” the text says. It calls for “intensified efforts” on the remaining issues.The EU are pushing for a “binding convergence mechanism” to ensure permanent alignment with EU laws as the price for a “deep and comprehensive” trade deal. “A third country [cannot] have the same benefits as a member state of the European Union,” it said.