EU warns Johnson plan on rules divergence will hinder trade talks

EU warns Johnson plan on rules divergence will hinder trade talks

UK demand to split standards raises concerns among governments and European Parliament

Boris Johnson’s plans to diverge from EU rules after Brexit will reduce the bloc’s willingness to strike an ambitious trade deal with the UK, officials and diplomats in Brussels have warned.

Mr Johnson’s team this week told their EU counterparts they want to abandon prior commitments made by Theresa May to maintain a “level playing field” in areas including environment and social standards in exchange for a free-trade area for goods.

However, Britain’s new demand clashes with EU conditions for trade negotiations and is fuelling concerns among governments and within the European Parliament, which would have a binding say over any deal.

EU trade deals require approval from the EU parliament and the Council, which represents national governments. Any pact with Britain is also likely to require ratification in national parliaments.

The European Commission told a meeting of EU ambassadors on Wednesday that, given the political resistance in Europe against the recent Canada free trade deal and also to talks with Latin America’s Mercosur bloc, the obstacles to ratifying a UK trade agreement should not be underestimated.

“There could be problems to ratify an FTA at any subsequent stage unless this [level playing field] is balanced,” the commission said, according to a diplomatic note of the meeting.

Guy Verhofstadt, the European Parliament’s Brexit co-ordinator, told the FT on Thursday that “asking for a basic trade deal with the Union while refusing regulatory alignment and tearing up their level playing field commitments means the UK will find it very difficult to achieve an ambitious trade agreement with the EU”.

“In this scenario, ratification would be further jeopardised,” he said.

David Frost, the UK prime minister’s Brexit negotiator, told EU counterparts this week that Britain wants a “best in class free trade agreement” but that the country should not be bound to level playing field rules that go beyond the kinds of provisions in existing EU trade deals, such as those it has with Canada and Japan.

As a result, Britain wants to rewrite parts of a political declaration on future EU-UK relations that was negotiated by Mrs May.

In the EU-Canada deal, which is seen by many Brexiters as a model, both sides committed not to loosening their labour laws or environmental standards to gain an unfair advantage.

The agreement also allows each side to seek an official ruling from an expert panel if they think the other is not living up to its obligations. But no sanctions are foreseen for breaches of the pact.

The EU’s longstanding position is that more rigorous level playing field rules are needed for the UK, both because of the high degree of market opening that Britain is seeking and because of Britain’s economic weight as a trading partner.

EU leaders in March last year said that striking “a balanced, ambitious and wide-ranging free trade agreement” with Britain would depend on having “sufficient guarantees for a level playing field”.

One national diplomat said Mr Johnson’s wish to break free from EU standards was “as concerning as him dropping the backstop” — a reference to Mr Johnson’s determination to renegotiate the mechanism intended to avoid a hard border in the island of Ireland.

 “In the end there is [an] inverse relationship between the room for the UK to diverge and the comprehensiveness of a future trade deal. Without a level playing field there will not be a broad and ambitious FTA”, the diplomat said, adding that it was a key issue for countries such as the N

A UK government spokesperson said Britain was seeking a “comprehensive, ambitious future partnership including a ‘best in class FTA’ and wider provisions to cover economic, security and cross-cutting co-operation between the UK and the EU”.

“After we leave the EU we will be free to set our own laws and to strike trade deals with new global partners outside the customs union and single market,” the spokesperson added.

Brussels fears plans to diverge present a threat to EU economies that are closely integrated with the UK, where ministers fret that regulatory divergences could provide Britain with a competitive edge.

In a sign that Brexit diplomacy is entering an especially sensitive phase, Michel Barnier, the EU’s chief negotiator, cancelled a planned September 9 speech in Northern Ireland, saying he was afraid that his remarks could be seized on and exploited by politicians in Britain.

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