Brussels warns UK will suffer more from lack of EU trade deal

Brussels warns UK will suffer more from lack of EU trade deal

Ursula von der Leyen says timetable for post-Brexit transition will be challenging

Britain will suffer more than the EU if the two sides cannot broker a trade deal by the end of next year, the president of the European Commission has warned in a response to Boris Johnson after the UK prime minister ruled out extending talks.

Ursula von der Leyen said the timetable for building a future relationship with Britain was “extremely challenging”, given that the UK’s post-Brexit transition period will expire at the end of 2020. She said negotiators would do their best in the “very little time” available.

Mr Johnson this week categorically dismissed the possibility of asking for any extension, and senior UK government ministers such as Michael Gove have insisted that there is enough time to do a deal.

But EU officials have warned that the deadline will limit the scope of trade talks, as the two sides will have to concentrate on preventing a breakdown in core economic relations.

Speaking to the European Parliament on Wednesday, Ms von der Leyen made clear that the UK stood to bear the brunt of the damage if a deal were not reached in time.

“In case we cannot conclude an agreement by the end of 2020, we will face again a cliff-edge situation,” she said. “This would clearly harm our interest but it will impact more the UK than us, as the EU will continue benefiting from its single market, its customs union and the 700 international agreements we signed with our partners.”

Those international agreements provide European companies with a web of market access rights to non-EU countries, covering everything from fishing to aircraft take-off and landing slots. Britain has been racing to negotiate replacement deals for at least some of these before the end of the transition period.

Speaking in the same European Parliament session, Michel Barnier, the EU’s chief Brexit negotiator, made clear that the entire future relationship negotiation could not realistically be wrapped up by the end of 2020.

“We can’t do it all, but we will give it our all,” he said. “If we want to give this relationship all its dimensions, we need to give it more time and continue beyond the end of the transition, continue to work with the British and negotiate,” he said.

On the trade negotiations, Mr Barnier said the EU’s willingness to open its market would depend on how far Britain was willing to stick close to the union’s regulatory standards.

“Does it want to distance itself, and if so how far, from our regulatory model?” Mr Barnier said. “It is the answer to this question that will determine our level of ambition.”

Ms von der Leyen said Brussels would organise negotiations “to make the most of this short period” before the end of 2020. Brussels hopes that its draft mandate for the negotiations will be approved by EU governments in February, allowing talks to begin on March 1.

Ms von der Leyen’s comments were her first on Brexit since it became clear that Mr Johnson will legislate to ban himself from extending the transition period. Under the terms of Britain’s EU divorce treaty, the UK would need to make any extension request before July 1 next year.

Commission officials on Tuesday briefed EU27 diplomats that, for legal reasons, it would be difficult to grant an extension after July 1, even if trade negotiations were bogged down in the second half of the year and both Britain and the EU agreed that more time was needed.

Two EU officials told the Financial Times that a British extension request made after July 1 would need to be handled through the negotiation and ratification of a new international treaty.

A cliff-edge scenario “is clearly not in our interest”, Ms von der Leyen said, adding that she hoped that Britain and the EU would be able to build “an unprecedented partnership”.

“I want us to become good neighbours with our friends in the United Kingdom”, she said.

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