EU, UK Bracing for Tough Post-Brexit Trade Talks

EU, UK Bracing for Tough Post-Brexit Trade Talks
Britain's Prime Minister Boris Johnson leaves number 10 Downing Street in central London on Jan.22, 2020. (Tolga Akmen/AFP via Getty Images)
News Analysis

BRUSSELS—The European Union is bracing for a stormy opening to post-Brexit trade talks as it puts the finishing touches to a negotiating mandate that will offer Britain worse trading terms than it has given Canada.

Senior EU figures expect a series of early rows over the conditions attached to market access for goods, with the two sides miles apart in their expectations for a tariff- and quota-free trade agreement.

In a series of meetings over the past two weeks, diplomats from the 27 European countries, working with officials from the Commission, have pulled together the bloc’s negotiating positions and hardened their stance in key areas.

Much of the discussion has focused around the EU’s insistence that the UK signs up to a robust level playing field mechanism that would see it continue to follow swathes of rules made in Brussels.

European countries fear Britain will lower its standards to match those of the United States in key areas like agriculture, labor rights, taxation, and the environment, allowing its companies to undercut those in the EU.

They also want the UK to continue applying their state aid rules due to concerns that Prime Minister Boris Johnson will take an interventionist approach and pump government cash into industries hit by the fallout from Brexit.

Top EU figures, including chief negotiator Michel Barnier, have warned that Britain’s geographical proximity and the volume of its trade with the bloc means it must be offered even less generous terms than Canada or Japan.

They argue that due to the “economic interdependence” of the two sides, the risk to the single market from letting the UK diverge is one that has to be more tightly monitored and controlled.

In a sign of Brussels’ distrust, EU officials have even argued that British industry bodies shouldn’t be allowed to certify goods as confirming to European standard—a right afforded to Canada and Japan.

“We have to be very clear on there is a difference whether you’re a member state or not where access to the single market is concerned,” EU Commission President Ursula von der Leyen said. “The closer the UK is to the EU the better the access to the single market. There’s a condition—either you align and you accept the rules, then you’re close, or you’re more distant.”

She has developed a blunt message that there can be very limited access to European markets without following the rules, which EU officials say is an attempt to ram home the stark nature of the choice the UK is taking.

British ministers have strongly rejected the EU’s demands for a level playing field mechanism, with British Finance Minister Sajid Javid setting nerves jangling in Brussels with his strident talk of breaking free from the bloc’s regulations.

The two sides are also set for a falling out over fishing rights, with a group of eight coastal member States led by France demanding a continuation of the status quo as a condition of even the most basic trade deal.

They want access and quota levels for catches, currently set at an EU level, to be kept the same. That flies in the face of Johnson’s vow to take back control of the UK’s waters for British fishermen after Brexit.

EU officials and diplomats also fear an acrimonious falling out if the Irish border, which was such a contentious issue throughout the withdrawal phase, is dragged into the trade talks by the UK side.

They fear that British negotiators will threaten to not properly implement the checks in the Irish Sea, agreed between the two sides so the land frontier could stay open without compromising the single market.

“It’s not unlikely they’ll use this to try to exert pressure, but that would be counterproductive. It will backfire, but we’re afraid it’s the calculation they’re making,” one European official said on the condition of anonymity.

Von der Leyen has said the EU will “very closely” monitor the implementation of the Irish protocol and warned the British prime minister that he must “abide by the law.”

Officials and diplomats in Brussels say they have experienced strong deja vu watching the UK’s early approach to trade talks, which they feel mirrors former British Prime Minister Theresa May’s opening gambits back in 2017.

“They’re making a textbook repeat of the same mistakes. If a managed no deal is the strategy, to try to put pressure on EU unity and force a series of sectoral agreements, once again it won’t work,” an EU source said.