Brexit Talks Sour With U.K. Slamming EU’s ‘Unworthy’ Offer
David Frost, U.K. European Union envoy, departs Brexit talks at a restaurant in Luxembourg. (Photographer: Geert Vanden Wijngaert/Bloomberg)

Brexit Talks Sour With U.K. Slamming EU’s ‘Unworthy’ Offer

(Bloomberg) --

Boris Johnson’s chief Brexit negotiator accused the European Union of offering the U.K. only a “low-quality” trade deal as talks between the two sides descended into acrimony.

In a dramatic intervention in the increasingly fractious negotiations over the future U.K.-EU relationship, David Frost complained the bloc is treating Britain as “unworthy” of a fair deal. He told his EU counterpart Michel Barnier to “think again.”

The EU is demanding that the U.K. sign up to some of the bloc’s rules as the price for a trade deal that would give a large neighbor access to its single market of more than 450 million consumers. Barnier said last week Britain was “looking to maintain the benefits of being a member state, without the obligations.”

“We find it perplexing that the EU, instead of seeking to settle rapidly a high-quality set of agreements with a close economic partner, is instead insisting on additional, unbalanced, and unprecedented provisions in a range of areas, as a precondition for agreement between us,” Frost wrote in a four-page letter published on Tuesday, hours after the U.K. released its own draft of the trade deal it wants.

Frost said the EU is offering “not a fair free trade relationship between close economic partners, but a relatively low-quality trade agreement coming with unprecedented EU oversight of our laws and institutions.”

The letter is likely to raise tensions even further in the negotiations, which have effectively reached an impasse. After the last round of talks concluded on Friday, Barnier said he was pessimistic about the chances of an agreement by the year-end.

“No Longer Members”

The U.K.’s draft legal texts, published for the first time on Tuesday, underscored the gulf between the two sides. The documents set out a comprehensive plan for trade in goods, as well as for other issues including the contentious issue of fishing rights -- but barely mention the so-called level playing field commitments the EU is determined to include in any accord to prevent the U.K. from undercutting the bloc’s economy.

The U.K. says the bloc’s demands to stick to its rules on areas such as state aid and workers’ rights are an unnecessary infringement of its sovereignty, and has accused the EU of demanding more from Britain than it does of other countries with which it has signed trade deals.

“The EU essentially wants us to obey the rules of their club, even though we’re no longer members,” Cabinet Office minister Michael Gove told the House of Commons in London on Tuesday. “It remains difficult to reach a mutually beneficial agreement while the EU maintains such an ideological approach.”

Frost said the U.K.’s draft free trade agreement approximates those the EU has signed with Canada and Japan, while its proposals to grant EU boats access to U.K. waters on an annual basis is similar to the deal the bloc has signed with Norway. The EU has made any trade deal conditional on the U.K. giving European boats the same access they had before Brexit.

“Tangible Progress”

The two sides have until the end of this year to reach an agreement or the U.K. will default to trading with the bloc on terms set by the World Trade Organization -- meaning steep tariffs on goods like cars.

In a tweet on Tuesday, Barnier said he welcomed the U.K.’s publication and pointed out the EU’s version had been released two months ago.

“In the next round, we must make tangible progress across all areas,” he said.

In its own version of the draft treaty, published in March, the EU devoted almost 30 pages to how the U.K. should stick to the bloc’s rules in areas such as state subsidies, environmental standards and workers’ rights. The British text includes three sentences on “upholding levels of protection” to encourage trade.

“Why should we help British businesses provide their services to Europe when we’d have no guarantee that our businesses would get a fair play treatment in the U.K.?” Barnier said at a news conference on Friday.

The documents show the U.K. is also seeking:

  • continued access for U.K. financial services firms to ensure cross-border banking, insurance, pensions, and asset management aren’t disrupted
  • agreements on data sharing and telecommunications to avoid potential discrimination over roaming fees
  • continued cross-border data transfers, with no company forced to locate servers in a specific jurisdiction, as well as harmonized privacy provisions that don’t make explicit reference to the EU’s General Data Protection Regulation.

Just one more round of talks remains before politicians are scheduled to meet in June to take stock and try to work out the way ahead. The lack of progress increases the chances the British government will pull the plug on the negotiations and pursue what it calls an Australian approach. That would mean leaving the bloc at the year-end without a trade deal in place, heaping more pressure and disruption on an economy already reeling from the coronavirus pandemic.

©2020 Bloomberg L.P.

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