BRUSSELS (Reuters) – EU negotiators are prepared to supply Theresa May a free-trade space after Brexit however say that, opposite to her “Chequers” plan, there have to be a customs border that can make commerce lower than “frictionless”, based on an inside EU doc seen by Reuters on Tuesday.
Britain’s Prime Minister Theresa May, European Commission President Jean-Claude Juncker and Luxembourg’s Prime Minister Xavier Bettel attend the European Union leaders casual summit in Salzburg, Austria, September 20, 2018. REUTERS/Leonhard Foeger
The doc — three pages of “defensive points” for EU officers to make towards the UK prime minister’s July proposal on future ties with the bloc — could provide May some consolation in displaying a readiness to seal a free commerce settlement (FTA) like these giving entry to Japan or Canada’s items and providers.
But as she prepares for her Conservative Party conference this weekend, it additionally rams home, in some element, the rejection of the Chequers proposal for a particular customs deal that may keep away from border checks on items and preserve provide chains fluid.
Brussels argues it will give Britain an unfair benefit within the single market, making use of some EU guidelines however not others.
Apparently stunned by the newest EU rejection of that concept when she met fellow leaders at a summit in Salzburg final week, May has insisted she is sticking with the plan, regardless of fierce opposition from some in her occasion. She complained that the EU had not given her detailed causes for its rebuff.
The doc, shared with nationwide delegations on the Salzburg summit final Wednesday, does go into element. EU negotiator Michel Barnier outlined the identical factors to EU leaders over lunch on Thursday.
British officers had, effectively earlier than Salzburg, been briefing opposing arguments to Barnier’s. But EU officers and diplomats mentioned all leaders had given help to their negotiator. One mentioned they understood that the customs ingredient of May’s Chequers plan would harm their very own financial pursuits.
Another EU official mentioned May had not solely irritated leaders by insisting vocally and really publicly that there was no different to her thought however by saying the EU objections had not been given to British negotiators intimately.
FREE TRADE AREA
Reflecting feedback made since July by Barnier, the doc lays out EU officers’ considering on Chequers, named after May’s residence the place the plan was hammered out.
It concludes it will “give the UK an unfair competitive advantage” — whereas additionally saying officers “welcome … proposals to develop an ambitious new partnership” for which the Chequers proposal of a “free trade area” ought to be “the starting point”.
Britain’s items might solely get unfettered entry to the EU’s market if the UK stays “fully bound by the EU acquis (accumulated legislation) in the same way as other single market members, including supervision and enforcement”.
Since Britain has firmly dominated that out, saying it would depart the EU’s single market and the customs union, the doc says a Canada-style FTA is the one remaining possibility.
“An FTA cannot ensure entirely ‘frictionless’ trade,” the doc says, including there have to be a customs border between the EU and Britain after Brexit.
“As a result, the UK’s goods trade will over time be less closely integrated economically with the EU than it is now. For example, cross-border supply chains will not operate seamlessly.”
May’s “common rulebook” for items would give Britain unfair benefit, it says. In one instance, research confirmed that many of the regulatory prices for metal or chemical substances producers weren’t in product requirements, which Britain gives to fulfill, however in requirements for manufacturing strategies — equivalent to guidelines on air pollution — from which London needs to have the ability to diverge.
It mentioned British producers would have to adapt to EU guidelines to be allowed into the only market: “This will make the biggest difference for agriculture and sensitive industrial goods with authorisations by public bodies including chemicals, automotive, pharmaceuticals, biocides.”
It additionally explains EU issues that “embedded services”, such because the financing of automotive gross sales, symbolize a lot of the price of many items and that, beneath Chequers, Britain gives to match EU requirements solely on the ultimate product, not guidelines that apply to, say, how employees produce the providers that accompany them.
The doc additionally gives officers with an argument to counter British complaints that Brussels has provided to maintain Northern Ireland successfully inside its financial rulebook with a purpose to keep away from border infrastructure with EU member Ireland that either side concern might revive battle on the island.
The challenge, the doc spells out, is that with 1.eight million individuals and “unique circumstances”, the EU is prepared to make a particular case of Northern Ireland, which is “much less of a competitive threat than the 60-million UK”.
May once more confused on Tuesday that Britain must see EU counter-proposals to maneuver the Brexit negotiations ahead.
Adding to May’s Brexit woes on Tuesday, Britain’s foremost opposition Labour Party signalled it will vote towards any deal she clinches with the EU and can be open to a second referendum with the choice of staying within the bloc.
Additional reporting by Alastair Macdonald; Editing by Gareth Jones