Prime Minister Boris Johnson will set out his demands of Canada-style trade deal, financial services, level playing field, seperate legal areas and fisheries to the EU this week.
Boris Johnson will set out his plans for a post-Brexit trade demands or deal with Brussels this week ahead of starting formal negotiations with the European Union.
The Prime Minister is expected to set out a series of demands to sign a basic free-trade agreement with the bloc. It is understood he will not request any bespoke or special arrangements from his European counterparts, instead favouring similar arrangements afforded to Canada, Japan and South Korea in their own pacts with Brussels. The Government’s opening salvo will follow the unveiling of EU negotiator Michel Barnier’s finalised negotiating guidelines after weeks of internal wrangling by European capitals. Here are five takeaways of what Mr Johnson will be asking for at the negotiating table.
Canada-style trade deal
The North American nation’s trade agreement with the European Union will provide the basis for any future pact the Government signs with Brussels.
The Comprehensive Economic and Trade Agreement has been referenced publicly and privately as the ideal model for any future relationship by the UK’s top officials.
It is understood David Frost, the UK’s chief negotiator, has told European counterparts he isn’t hunting for any special or bespoke agreement and instead will pursue an off-the-shelf model, such as the deals between the EU and Canada, Japan and South Korea.
Behind the scenes, the Government has acknowledged the pact could have economic consequences but the hit is worth regaining democracy sovereignty from Brussels.
Access to European markets for British bankers, and vice-versa, could become the one special deal signed between Brussels and the Government in the future relationship.
Mr Johnson understands the huge financial services relationship between UK and EU firms, and understandably wants to protect their profits.
The EU often operates using “equivalence” regimes, which allow the European Commission to judge whether a third country’s financial services regulations match their own.
But the City of London has been spooked by the prospect of such a deal because the Brussels-based executive can withdrawal access with as little as 30 day’s notice.
Former chancellor Sajid Javid let slip the UK might be about to request a “permanent equivalence” deal with the bloc, but it was swiftly shut down by Mr Barnier.
Despite the rebuttal, Britain will continue to ask for a longer-term arrangement to protect bankers on both sides of the Channel.
Level playing field
EU demands for Britain to remain aligned to large swathes of the bloc’s rules and regulations are amongst the most controversial in its opening negotiation gambit.
Mr Johnson has made clear that he is prepared to walk away from talks unless Brussels drops the “ridiculous” requests.
France is currently holding up Mr Barnier’s own draft negotiating guidelines with its hardline approach, which includes Britain cynically aligning to the bloc’s state aid and competition rules.
But a deal on “free and fair competition” is the most likely outcome of any negotiations between Mr Frost and his EU counterparts.
The Prime Minister’s top Europe adviser has told them he is willing to sign up to the same or similar competition provisions as in the Canada-EU trade deal.
Mr Barnier has ruled out such an arrangement because of Britain’s “proximity” to the bloc, but his claims have been dealt a severe blow by a Commission colleague.
Phil Hogan, the trade commissioner, however, backed Britain on Canada deal, by telling Dutch parliamentarians that it has “legally binding and enforceable” rules on fair competition.
Separate legal areas
Perhaps Mr Johnson’s most important aim is to create two separate legal jurisdictions inside the UK-EU free-trade agreement.
The Government is comfortable with Brussels’ demand for the European Court of Justice to be the ultimate arbiter of EU law, just like the Supreme Court with UK law going forward.
The aim for the Prime Minister’s negotiating team is to carve out two separate legal jurisdictions in which European judges have no jurisdiction over UK law.
A fundamental negotiating goal for Britain is to reclaim sovereignty back from Brussels, with two separate regulatory spheres covering the UK and EU.
Pushy EU nations, especially France, are demanding continued access for European trawlermen to Britain’s fishing waters.
This has led to threats to block the sale of British-caught fish on the European market, a key revenue source for UK fishermen.
But Mr Johnson has promised to reclaim control of the country’s territorial waters and become an independent coastal state after the end of the transition period.
One proposed way to strike a fisheries agreement with Brussels would be on one-year rolling arrangement with annual discussions to decide on quotas.
This would allow the Prime Minister to say Britain has full control of its fishing waters while still afforded access to European vessels.