Via Financial Times

Boris Johnson is on course for a significant clash with the EU in trade talks on the future relationship with the bloc, with both sides setting out opposing stances on whether a deal will include alignment on rules.

The British prime minister will set out his approach to the negotiations on Monday in a speech outlining his vision for the UK after Brexit. He will state that Britain will maintain high standards “without the compulsion of a treaty”.

But Michel Barnier, the EU’s chief Brexit negotiator, will say the opposite when he unveils the bloc’s proposal for its future relationship with the UK. He is expected to insist that Britain’s future market access be directly linked to its willingness to align with EU rules.

The sparring comes ahead of what is expected to be a mammoth negotiation that both sides know needs to be concluded by the end of October given that Britain’s transition period expires in 11 months.

“There is no need for a free trade agreement to involve accepting EU rules on competition policy, subsidies, social protection, the environment, or anything similar any more than the EU should be obliged to accept UK rules,” Mr Johnson is expected to say.

“The UK will maintain the highest standards in these areas — better, in many respects, than those of the EU — without the compulsion of a treaty and it is vital to stress this now.”

EU officials said Mr Barnier will underline that a tariff-free, quota-free trade deal will be impossible if the UK insists on diverging from EU standards.

READ ALSO  Santander back to profit after quicker customer recovery

Brussels’ draft mandate for the negotiations will call for a “level-playing field” that would require the UK to stay in line with EU environmental and labour market rules as they stand at the end of Britain’s post-Brexit transition period, according to three people briefed on the contents of the mandate.

For the particularly sensitive area of state-aid policy, Britain would be expected to stay aligned with the EU even as the bloc’s rules evolve in future, the officials said.

But the prime minister is likely to reject a Norway-style close alignment deal with the EU and state that his preferred outcome is an agreement similar to Canada’s “which opens up markets and avoids the full panoply of EU regulation”.

If the two sides are unable to strike such an agreement, Mr Johnson is expected to say the UK will pursue a deal similar to Australia’s relationship with the bloc, essentially a rebadged version of a “no-deal” Brexit that would see Britain trading on World Trade Organisation terms.

“The choice is emphatically 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 . . . we will seek a pragmatic agreement on security, protecting our citizens without trespassing on the autonomy of our respective legal systems,” Mr Johnson will say.

This new stance has prompted bafflement in Brussels, given that Canberra is still in the process of negotiating a wide-ranging trade deal with the EU.

READ ALSO  SE: Thai Hotel Operator Minor Under 'Lot of Pressure': Founder

EU officials said the draft mandate would not mark a shift in Brussels’ position and would draw heavily on the political declaration on future relations that Mr Johnson agreed with the bloc last year.

Brussels was irritated by comments from UK government officials over the weekend alleging that the EU had been “changing the terms” of the future relationship talks.

Britain argues that it is seeking a “Canada-style” deal and that the EU’s level playing field demands are entirely unjustified. The EU insists that this is a false comparison given that the UK is seeking greater market access and the economic relationship between Brussels and London is far larger.

“The political declaration says it all,” said one EU official.

EU leaders such as France president Emmanuel Macron have warned that Britain’s resistance to the level playing field threatens the tight timetable of the negotiations. Mre Macron has noted that a less ambitious deal, with specific tariff lines for sensitive products, would take longer to negotiate than simply agreeing that all goods are tariff-free.

Brussels will call for any future relationship deal to allow either side to take quick “remedies” if the other is in breaches its commitments. It will argue for the possibility to take “interim” measures without needing to wait for an arbitration panel to reach a final decision.

It will be up to national governments over the coming weeks to decide whether to toughen the EU’s level playing field demands further, or amend other parts of the draft mandate. The EU plans that the mandate will be adopted at a ministerial meeting on February 25.

READ ALSO  Trump campaign places Facebook ads telling users wrong election day

Other parts of the draft mandate are also likely to infuriate the UK. Britain has rejected any suggestion that the European Court of Justice could play a role in the future relationship, but Brussels will insist that the ECJ be the sole arbiter of disputes over how to interpret EU law — something Britain actually already agreed to in the political declaration.