The UK's Brexit red lines have severely circumscribed EU options for any future deal, European Council president Donald Tusk warned London on Wednesday.
“It should come as no surprise,” he said, “that the only remaining possible model is a free trade agreement.”
“Our agreement will not make trade between the UK and the EU frictionless or smoother,” Mr Tusk added.” It will make it more complicated and costly than today, for all of us. This is the essence of Brexit.”
A draft of the broad principles of a post-Brexit free trade agreement between the EU and UK was sent out on Wednesday by Mr Tusk to member states for their approval at an EU leaders’ summit on March 23rd.
Although Northern Ireland is not explicitly mentioned, the draft insists that "negotiations can only progress as long as all commitments undertaken so far are respected in full, and calls for intensified efforts on the remaining withdrawal issues".
Northern Ireland
In effect, a reiteration of previous “no backsliding” commitments and of the Northern Ireland border provisions of the December joint accord.
Such a partnership should cover trade and economic co-operation as well as other areas, in particular the fight against terrorism and international crime
Speaking in Luxembourg, Mr Tusk said the draft, which pitches for free trade in goods in all sectors with zero tariffs, invites the UK to continue its security cooperation with the EU and participation in EU R&D, education and culture. He called for urgent discussions to ensure there as no danger of disruption to airline travel.
There are few surprises in well-rehearsed positions in the draft that first and foremost reiterate the EU’s insistence that outside the customs union and single market the UK will not be able to enjoy the rights it once had, and that there can be “no ‘cherry-picking’ . . . on a sector-by-sector approach”.
It restates “the union’s determination to have as close as possible a partnership with the UK in the future. Such a partnership should cover trade and economic co-operation as well as other areas, in particular the fight against terrorism and international crime, as well as security, defence and foreign policy”.
The aim should be to prevent unfair competitive advantage that the UK could enjoy through undercutting of current levels of protection with respect to competition and state aid
The EU is ready “to initiate work towards a free trade agreement (FTA), to be finalised and concluded once the UK is no longer a member state”.
“Being outside the customs union and the single market will inevitably lead to frictions,” the draft warns. “Divergence in external tariffs and internal rules as well as the 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.”
Pose problems
Divergences, it should be noted, that will pose problems for the UK’s preferred border option. But an agreement will have to contain “robust guarantees which ensure a level playing field. The aim should be to prevent unfair competitive advantage that the UK could enjoy through undercutting of current levels of protection with respect to competition and state aid, tax, social, environment and regulatory measures and practices”.
The agreement may contain provisions for the trade in services, an area where the UK is particularly concerned. But services would not enjoy the same unfettered access as goods and would have to be provided “under host state rules” , it says, and the UK will no longer share a common regulatory, supervisory, enforcement and judiciary framework.”
The draft also makes clear that special arrangements can be made to continue close collaboration in aviation, research and innovation, police and judicial cooperation, and security and defence . In these areas funding support will be expected from the UK.
“Personal data protection should be governed by union rules on adequacy with a view to ensuring a level of protection essentially equivalent to that of the union.”
