Government dismisses EU trade demands as unreasonable

Demands made by Brussels ahead of Brexit trade talks are unreasonable and ridiculous, a government source is claiming as the UK prepares to start negotiations. A new Brussels blueprint says the EU will seek to police UK subsidies, impose rules on its tax regime and ask the government to commit to aligning with the EU’s standards forever.

Yet, according to the UK government, Brussels has already agreed with countries such as Canada, South Korea and Japan that there should be no such requirements in its trade deals with them.

On subsidies, the EU is demanding that the UK sticks to Brussels rules permanently, according to the British government, and also wants jurisdiction over how the rules are enforced in the UK.

And on tax, in a move that will incense senior Tory Brexiteers, the government claims the EU wants the UK to comply with its standards and take part in its cross border tax planning arrangements.

The prime minister’s fury with Brussels has emerged after his chief negotiator, David Frost, and his 40-person Brexit task force met this week to finalise the UK government’s negotiating position.

The new European Commission president, Ursula von der Leyen, told the European Parliament this week that Mr Johnson would have to accept a “level playing field” on rules and standards.

But the PM said in a Brexit speech at Greenwich earlier this month there was “no need” for the UK to follow EU trade rules and there would be no alignment with Brussels under any post-Brexit deal.

The government is now insisting it is not asking for a “special, bespoke, or unique deal” with Brussels, but an agreement like those the EU has previously struck with other like-minded countries like Canada.

The Brussels demands are set out in an EU “draft mandate”, which member states and officials have been considering ahead of the formal start of negotiations between Mr Frost and the EU’s Michel Barnier.

The apparent deadlock, even before formal talks begin, suggests the trade negotiations during the Brexit transition period will be fraught and acrimonious and could lead to the UK leaving the EU with no deal.

Comparing the EU’s demands on the UK compared with its other trade deals, the UK argues:

  • In its trade deal with Korea, the EU removed 99.5% of tariff lines, and South Korea is not subject to any dynamic alignment on regulation. None of South Korea’s commitments on workers’ rights and environment are enforceable through the arbitration mechanism for this trade deal. Though subject to dispute settlement, there are no sanctions if South Korea fails to meet its commitments on labour and environment. The competition chapter is excluded from dispute settlement. South Korea is not subject to EU state aid rules.
  • In its trade deal with Japan, the EU removed 99% of tariff lines and Japan is not committed to any dynamic alignment on regulation. None of Japan’s commitments on workers’ rights and environment are enforceable through the arbitration mechanism for this trade deal. Though subject to dispute settlement, there are no sanctions if Japan fails to meet its commitments on labour and environment. The competition chapter is excluded from dispute settlement. Japan is not subject to EU state aid rules.
  • In its trade deal with Canada, the EU removed 98.7% of tariff lines and Canada is not committed to any dynamic alignment on regulation. None of Canada’s commitments on workers’ rights and environment are enforceable through the arbitration mechanism for this trade deal. Though subject to dispute settlement, there are no sanctions if Canada fails to meet its commitments on labour and environment. The competition chapter is excluded from dispute settlement. Canada is not subject to EU state aid rules.

According to the government, while both the EU and the UK are aiming for a tariff and quota free deal, asking for alignment on standards does not make sense when the EU’s standards fall below the UK’s on workers’ rights, environmental protections and health and safety.

The government also points out that the UK has a higher minimum wage than all but three EU member states and six EU countries have no minimum wage at all.

Source: News.sky.com

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