Brexit trade deal clash: UK and EU begin sparring over rules

[February 03, 2020]  By Elizabeth Piper and John Chalmers

LONDON/BRUSSELS (Reuters) - The European Union and Britain clashed over a post-Brexit trade deal on Monday with Prime Minister Boris Johnson insisting he need not sign up to the bloc's rules and Brussels warning of tariffs and quotas unless he did.

Britain wants to negotiate a trade deal by the end of 2020, though EU leaders say the further Britain diverges from their rules the less access it will have to the EU market.

Speaking just over two days since Brexit, Johnson cast Britain as the "supercharged" superman of free trade, and while it would not seek to undermine the bloc with a race to the bottom, he said there was no need to accept EU rules.

"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, any more than the EU should be obliged to accept UK rules," Johnson said.

The choice for Britain, Johnson said, was between a deal like Canada has with the EU or a much more distant deal like Australia.

He spoke in the Painted Hall at the Royal Naval College at Greenwich, where grand 18th Century paintings celebrate Britain's prosperity and naval power.

AMBITIOUS DEAL

The European Union wants an ambitious zero-tariffs and zero-quotas trade deal with Britain but this will be conditional on open and fair competition between the UK and the 27-nation bloc it quit last week, the EU's Brexit negotiator said.

Michel Barnier, unveiling the European Commission's mandate for talks with Britain on their future relationship, said there should be a level playing field over the long term on social, state aid and environmental standards.

"You cannot accuse us of a lack of ambition," he told a news conference in Brussels. "First and foremost, we will defend the interests of the union, its citizens and its businesses."

"We'll continue to prepare for a situation where no deal is being arrived at. We certainly don't want that to happen. We'll work to avoid that, but if we can't manage a deal by the end of the year there will be a cliff-edge on many fronts.

Britain's Prime Minister Boris Johnson participates in a workshop with children from the Richard Avenue Primary School prior to chairing a cabinet meeting at the National Glass Centre at the University of Sunderland, Sunderland, Britain January 31, 2020. Paul Ellis/Pool via REUTERS

"There will some areas where they’ll be no other solution. I’m thinking about trade and fisheries here," Barnier added.

The more that the EU and Britain have common standards, the higher the quality of access for Britain to the European single market, he said.

Barnier said a free trade agreement must include a deal on fisheries that would give reciprocal assess to waters and conditions on these must be established by July 1, 2020.

"We are ready to offer all this even though we know that there will be strong competition between the UK, our immediate neighbor, and the EU in the future," he said.

A 33-page draft mandate for negotiations released as Barnier spoke had one section in bold, and that read: "the envisaged partnership must ensure open and fair competition, encompassing robust commitments to ensure a level playing field".

The partnership should ensure "common high standards" in state aid, competition, state-owned enterprises, labor and environmental standards and "relevant tax matters", it said.

The draft mandate also sees a role for the Court of Justice of the European Union, for example in the case of a dispute.

Trade talks will begin in March. After criticizing his predecessor Theresa May's approach in negotiating a divorce deal with the EU, Johnson is striking a much tougher tone.

At the moment, much of EU-Australia trade runs along basic World Trade Organization rules, though there are specific agreements for certain goods. Australia is in the process of negotiating a trade deal with the EU, however.

(Editing by Guy Faulconbridge and Giles Elgood)

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