No 10 vision of fast-track trade deal at odds with industry

Boris Johnson will on Wednesday put himself at odds with some of Britain’s most successful industries when he sets out his plan to secure a fast-track trade deal with the EU that would see Britain diverge from the Brussels rule book.

Mr Johnson will map out his vision of an “ambitious free trade agreement” by the end of 2020 in his first face-to-face meeting with Ursula von der Leyen since she took over as European Commission president in December.

But the prime minister’s insistence that Britain must have the right to diverge from EU rules has been criticised by British industry because it would introduce new friction and costs at the border; it is seen in Brussels as an act of economic self-harm.

One senior EU official said the UK manufacturing sector “would not survive in its current form outside the single market” because “cumbersome” new rules at the border would add delays and costs to companies with integrated supply chains.

European Commission President Ursula von der Leyen will meet Boris Johnson at No 10 today.© Reuters European Commission President Ursula von der Leyen will meet Boris Johnson at No 10 today.Phil Hogan, EU trade commissioner, warned this week that Mr Johnson was swapping a “Rolls-Royce” trade deal for a “second-hand saloon” and that the consequences of his policy were “still not fully understood in the United Kingdom”.

Last October industries including the car sector, chemicals, food and drink, pharmaceuticals and aerospace warned of “serious risk” to competitiveness and “huge new costs and disruption” if Mr Johnson ended regulatory alignment.

The meeting is really to discuss holistically the UK’s withdrawal from the European Union and to look forward to the year ahead in all of its dimensions.

European Commission spokesman

However Mr Johnson will insist that a trade deal with the EU must be based on an ambitious free trade agreement — similar to the one agreed between the EU and Canada — and that Britain had to be free to set its own rules.

Ministers privately admit that Mr Johnson’s approach “will mean friction” at the border, but insist the policy was settled. “Rather than trying to deny it, we should accept it and see what we can achieve in the negotiation,” said one.

British trade negotiators will try to reduce friction by committing Britain to maintaining high standards and agreeing “equality of outcome”, but ultimately there will still need to be paperwork and checks which currently do not exist.

EU officials also warn that British professionals stand to lose the automatic recognition of their qualifications in Europe, meaning architects, midwives and other skilled workers risk losing opportunities to work in the bloc.

Mr Johnson will tell Ms Von der Leyen there would be no extension to the transition period that expires in December 2020; Brussels for its part wants Britain to recognise that some parts of the future relationship negotiations will not be settled in 2020.

The EU is using every opportunity to underline that the UK’s future market access will depend on its willingness to stick closely to European rules in areas such as environmental policy and state aid.

Officials said the commission is exploring options for preventing a cliff-edge if a full agreement is not ready in time. The commission has identified areas, such as air transport, where the EU can unilaterally grant access rights that would prevent a breakdown in relations.

A spokesman for the European Commission said that future relationship talks between the EU and UK will not begin in Downing Street on Wednesday, and that the intention is rather to build a sense of shared endeavour around the negotiations.

Brussels is keen to avoid giving any impression that is seeking to punish Britain for leaving the EU, in what are expected to be tough negotiations that will also test the bloc’s internal unity.

“The meeting is really to discuss holistically the UK’s withdrawal from the European Union and to look forward to the year ahead in all of its dimensions,” said a European Commission spokesman.

Both sides also hope Wednesday’s meeting will avoid the kind of diplomatic mis-steps that characterised some previous high-profile Brexit encounters between UK leaders and the commission.

Chief among those is a disastrous Downing Street dinner in 2017, when previous commission president Jean-Claude Juncker’s misgivings about prime minister Theresa May’s Brexit plans were leaked to the press.

A carefully planned meeting between Mr Johnson and Mr Juncker in Luxembourg last year also descended into farce after Mr Johnson fled protesters and the country’s prime minister, Xavier Bettel, gave a press conference beside an empty podium.

Meanwhile Keir Starmer suffered a “mauling” at the hands of the shadow cabinet on Tuesday after the shadow Brexit secretary proposed an amendment to extend the UK’s transition period out of the EU by two years if no trade deal is agreed by July.

Sir Keir, one of the most prominent pro-EU figures in the shadow cabinet, has been blamed by some colleagues for the party’s policy of backing a second referendum on Brexit. Labour lost 59 seats in the general election in December, mostly in Leave areas of the Midlands and northern England.

During a turbulent session of the shadow cabinet eight colleagues spoke out against Sir Keir’s proposed amendment to the EU Withdrawal bill, arguing instead that the issue should not be pushed to a Commons vote.

“It was a bit of an embarrassing defeat for Keir . . . as people were arguing it made us look completely deaf to what voters have said,” said one senior Labour figure. One member of the shadow cabinet said: “It was a mauling for Keir to be honest.”

Source: Ft.com

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