EU Countries Want Ability to Punish UK in Trade Deal Disputes: Report

EU Brexit negotiator Michel Barnier gives a press conference on negotiations with UK on on
KENZO TRIBOUILLARD/AFP via Getty Images
Victoria Friedman

European Union member states want to be able to suspend elements of a future trade deal with the UK as part of their arsenal of punishments should Britain disobey rulings by a dispute panel overseeing the agreement.

The European Commission has already said that it is prepared to issue fines should the dispute panel deem the UK to be in breach of the yet-to-be-negotiated UK-EU trade deal. Now EU member states are reportedly seeking suspension of aspects of the deal that gives Britain certain access arrangements as other modes of punishment.

One such proposed sanction is blocking British airlines was stopping off in EU countries on their way to non-EU destinations. Another is suspending cabotage rights — the ability to deliver freight inside or between EU countries — meaning the UK could only transport goods to individual EU nations and back.

A leaked draft negotiating mandate from the Commission seen by The Telegraph says: “The other Party would be entitled to request financial compensation or take proportionate and temporary measures, including suspension of its obligations within the scope of the envisaged partnership as well as any supplementing agreements.”

Brussels bureaucrats and EU leaders are fearful of the UK freeing itself from the shackles of needless regulations and becoming a competitor on Europe’s doorstep, with the current prime minister of Ireland, Leo Varadkar, recently admitting that reluctance to offer the UK a good deal is down to the country’s proximity to the continent.

Reports from last month exposed that the EU is prepared to offer the UK a worse trade deal than it signed with Japan or Canada. The Commission is also said they have drawn up a list of dozens of British financial services it could block if the UK makes good on its promise to diverge from Brussels’ rules.

Prime Minister Boris Johnson has said that he will not agree to maintain EU regulations — which could hinder signing free trade agreements with other countries — in exchange for agreeing a deal with the EU. Two senior Cabinet ministers, Michael Gove and the Treasury’s Rishi Sunak, have also said that the UK does not need a deal with the EU to trade with it.

The UK’s trade and international representatives have been fast and hard at work since the UK left the EU to demonstrate that Brexit Britain is looking outward to the rest of the world, not inward into Europe. Last week, the UK took an independent seat at the World Trade Organization (WTO), the ambassador signalling the country’s trade interests by sitting next to his American counterpart rather than Brussels’.

Secretary of State for Foreign and Commonwealth Affairs Dominic Raab also engaged in a brief tour of southern Pacific countries at the latter end of last week to discuss trade deals, meeting with representatives from Australia, Japan, Singapour, and Malaysia.

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