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UK and EU conflict over commerce with 11 months to make a deal – Enterprise Information

Photo: The Canadian Press

British Prime Minister Boris Johnson 

Britain and the European Union set out clashing opening gambits Monday on striking a post-Brexit trade deal, making it clear that each side is willing to walk away without an agreement rather than compromise on key issues.

U.K. Prime Minister Boris Johnson sent a bravado-filled salvo toward Brussels three days after Britain left the bloc, the first country to exit. In a speech to business leaders and international diplomats in London, Johnson said “we want a free trade agreement” — but not at any cost.

“I see no need to bind ourselves to an agreement with the EU,” he said, insisting that Britain would “restore full sovereign control” over its borders, rules and economy.

EU chief negotiator Michel Barnier was equally emphatic that the EU’s 27 remaining nations wouldn’t agree to any British trade deal just to avoid a costly, chaotic “no-deal” at the start of 2021, when an 11-month post-Brexit transition period ends.

“We are in favour of free trade, but we are not going to be naive,” Barnier said. “If the request is to have broad access to a market of 450 million European consumers, zero tariffs, zero quotas — that won’t happen for nothing, or in any kind of condition.”

In their divorce agreement, Britain and the EU agreed to strike an “ambitious, broad, deep and flexible partnership,” including a free trade deal and agreements for security and other areas. The details are to be worked out during a transition period lasting until the end of 2020, in which relations stay essentially unchanged. For the rest of this year the U.K. will continue to follow EU rules, although it will no longer have a say in EU decision-making.

After that, a cliff-edge looms. But Johnson insisted the choice facing Britain was not “deal or no deal.”

“The question is whether we agree a trading relationship with the EU comparable to Canada’s – or more like Australia’s,” Johnson said.

Australia does not have a free-trade deal with the EU, and Australia-style trade would mean a panoply of new tariffs and other barriers between the U.K. and the EU, its near neighbour and biggest trading partner.

Britain is aiming for a “Canada-style” free trade agreement with the EU, which would eliminate almost all tariffs and cover both goods and services. But it is adamant it won’t agree to follow the EU’s entire rule book in return for unfettered trade because it wants to be free to diverge in order to strike other new deals around the world.

The bloc insists there can be no trade deal unless Britain agrees to a “level playing field” and doesn’t undercut EU regulations, especially when it comes to the environment, workers’ rights and health and safety standards.

“There is no such thing like a free ride to the (EU’s) single market,” EU Commission President Ursula von der Leyen said. “It is always rights and obligations in a good balance.”

Johnson, however, doubled down on Britain’s tough stance in Monday’s speech. He delivered it in the Painted Hall at the Old Royal Naval College in Greenwich on the River Thames, a spot steeped in Britain’s past military glories. The vast hall, covered in paintings glorifying British achievement, is where Adm. Horatio Nelson lay in state after his death at the Battle of Trafalgar against the navies of France and Spain in 1805.

Even as he set out a vision of trade that would impose new barriers between Britain and the EU, Johnson said the U.K. would become a champion of free trade in a world where “the protectionists are gaining ground.”

And he sought to allay EU fears that a post-Brexit Britain will slash workplace and environmental protections in order to gain a competitive edge.

“The U.K. will maintain the highest standards in these areas — better, in many respects, than those of the EU — without the compulsion of a treaty,” Johnson said.

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