The UK’s chief Brexit negotiator will today set out Britain’s ambitions for its future trading relationship with the EU.
David Frost will say that the UK must be granted a trade deal on the same terms as the EU has given to Canada, South Korea and Japan.
But the French foreign minister Jean-Yves Le Drian has warned the UK the two sides would “rip each other apart” to gain advantage in trade negotiations.
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What the UK wants
The UK government says it wants a trade deal based on “friendly co-operation between sovereign equals”.
Ahead of Frost’s speech in Brussels on Monday, a Downing Street spokesperson said: “Our approach is clear – we are not asking for anything special, bespoke or unique, but are looking for a deal like those the EU has struck previously with other friendly countries like Canada.
“We want a relationship based on friendly co-operation between sovereign equals, one centred on free trade and inspired by our shared history and values.”
Boris Johnson has been clear that his preference for the UK’s future trading relationship with the European Union is a “Canada-style” deal that would eliminate most tariffs between the UK and EU but keep border checks in place.
Like Canada, the UK should be free to strike trade deals with non-EU nations around the world, says Johnson.
However, Canadian financial services do not have full access to the European market. In 2018, financial services contributed £132bn to the UK economy – 6.9% of total economic output.
And analysis by the Treasury estimates that the UK economy would be 4.9% smaller under a Canada-style deal after 15 years than it would be if it had remained in the EU.
Keir Starmer, shadow Brexit secretary and Labour leader frontrunner, said in 2018 that Labour would vote down a Canada-style deal, says The Guardian.
At the weekend the government again cited Canada as one of the previous deals the EU had struck without requiring regulatory alignment.
It also mentioned the South Korea deal, where the EU removed 99.5% of tariff lines, and Japan's deal, where it removed 99% of them.
None of the three countries was forced to sign up to regulatory alignment, EU state aid rules or workers and environmental rights enforceable through arbitration, says City AM.
Johnson has said that if the UK cannot get a Canada-style trade deal with the EU, then it would accept an “Australia-style” deal – a euphemism for no deal at all.
Last week, European Commission president Ursula von der Leyen said she was “surprised” to hear Johnson talk of an “Australian model”.
“Australia without any doubt is a strong and a like-minded partner. But the European Union does not have a trade agreement with Australia. We are currently trading on WTO [World Trade Organization] terms,” she said.
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What the EU wants
Speaking at a security conference in Munich on Sunday, Le Drian said the UK and EU were at odds on a number of issues.
“I think that on trade issues and the mechanism for future relations, which we are going to start on, we are going to rip each other apart,” he said. “But that is part of negotiations, everyone will defend their own interests.”
The French foreign minister also said it will be tough for the UK to honour Johnson’s pledge to get a trade deal with the EU by the end of the year, says the BBC.
Von der Leyen and EU chief negotiator Michel Barnier have both publicly doubted the UK’s aim to get a trade deal over the line in 2020.
The EU might also be resistant to a Canada-style deal with the UK. The original 2017 agreement between the EU and Canada was met with street protests across Europe, with Italy threatening not to ratify the deal because it didn’t protect EU interests.
The EU has warned that the UK can’t keep its “high quality” market access if it diverges from EU social and environmental standards.
Johnson will dismiss the EU’s demands that the UK abide by EU rules on tax and workers’ rights as unreasonable and ridiculous, a government source told The i newspaper.
The prime minister said in a speech earlier this month that there was “no need” for the UK to follow EU rules in order to reach a trade agreement.
The bloc is likely to fight hard over fishing rights, with the EU likely to insist member states keep access to UK waters as part of any agreement. Johnson has said the UK will act as an “independent coastal state” and will control its own fisheries.
