U.K. Dreaming When It Comes to Post-Brexit Trade, EU Chief Says
EU's Tusk Warns May Trade After Brexit Will Come With `Friction'
(Bloomberg) -- European Union President Donald Tusk warned the U.K. that it can’t expect frictionless trade outside the bloc’s single market, lowering again Prime Minister Theresa May’s expectations a day before she’s due to deliver a major speech on her vision for the post-Brexit relationship.
“Friction is an inevitable side-effect of Brexit,” Tusk told an an audience of business leaders in Brussels on Thursday, shortly before leaving for London to meet May in Downing Street. It’s the latest in a string of developments this week that’s highlighted May’s obstacle-strewn path to getting a satisfactory Brexit deal.
With less than a month until a crucial summit when May wants to reach agreement on a transition period and start discussing future trade, Tusk’s intervention is another sign the EU won’t compromise its main principles. The U.K. government has said it wants as little friction as possible in the post-Brexit trading relationship but the EU says it can’t enjoy the same benefits as if it were still a member.
The draft of the final Brexit deal, published by EU chief Brexit negotiator Michel Barnier on Wednesday, angered the U.K. government, with May saying an option to keep Northern Ireland in the EU’s customs union and parts of the single market was unacceptable.
“Until now, no one has come up with anything wiser than that,” to prevent a hard border re-emerging between the two Irelands, Tusk said, adding that he would ask May to come up with her alternative during their meeting later on Thursday.
Ultimately, the U.K.’s relationship with the EU would be determined by the government’s “red lines,” he said, reiterating that with Britain ruling out continued freedom of movement and oversight by the European Court of Justice, it couldn’t expect close ties.
“We acknowledge these red lines without enthusiasm and without satisfaction, but we must treat them seriously, with all the possible consequences,” said Tusk, who’s drawing up guidelines for negotiations on the post-Brexit links to be unveiled next week. “Everyone must be aware that the U.K. red lines will also determine the shape of our future relationship,” he said, in a remark that hints at a free-trade agreement similar to the EU’s deal with Canada, rather than anything with closer ties.
At a meeting between envoys of the remaining 27 countries in Brussels on Wednesday afternoon, Barnier said there’s no guarantee an agreement on transition terms will be reached this month, according to a person familiar with the discussion.
Opposition Labour leader Jeremy Corbyn raised the pressure on May on Monday when he said he backed the U.K. remaining in the customs union, a move that would largely solve the problem of keeping the Irish border invisible and make it easier for the U.K. to trade with the EU. On Wednesday, former Prime Minister John Major called for a free vote in Parliament over whether to hold a second referendum for the sake of the “wellbeing of the people.”
Tony Blair, Major’s successor as prime minister, will make a speech in Brussels on Thursday in which he’ll call on the rest of the EU’s leaders to help lead Britain “out of the Brexit cul-de-sac and find a path to preserve European unity intact.”
Speaking to BBC Radio 4 before his speech, Blair said the EU would never give the U.K. the same access to the single market as it enjoyed as a member.
“It is not a question of a tough negotiation or a weak negotiation, it literally is not going to happen,” Blair said.
--With assistance from Nikos Chrysoloras
To contact the reporters on this story: Ian Wishart in Brussels at iwishart@bloomberg.net, Marine Strauss in Brussels at mstrauss30@bloomberg.net.
To contact the editors responsible for this story: Alan Crawford at acrawford6@bloomberg.net, Jones Hayden, Nikos Chrysoloras
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