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EU’s Tusk to lay down Brexit trade red lines

Close ties?: European Council President Donald Tusk will on Wednesday unveil draft guidelines for the bloc's future relations with London, just days after British PM Theresa May spoke of a wide-ranging free-trade deal
AFP

Brussels (AFP) – European Union President Donald Tusk will on Wednesday unveil draft guidelines for future ties with Britain, which are expected to warn London it cannot have completely free trade after Brexit.

Days after British Prime Minister Theresa May made a long-awaited speech setting out London’s terms, Tusk will present his plans at a press conference with Luxembourg premier Xavier Bettel.

The leaders of the remaining 27 EU states must then approve the guidelines at a Brussels summit on March 22, setting the template for EU negotiator Michel Barnier in trade talks that could start as soon as April.

Tusk warned last week that Britain’s self-imposed conditions for leaving the European Union — that it must quit the single market and customs union — made “frictionless” trade impossible.

“Everyone must be aware that the UK red lines will also determine the shape of our future relationship,” Tusk said, adding that the EU viewed Britain’s restrictions “without enthusiasm and without satisfaction”.

“I want to stress one thing clearly. There can be no frictionless trade outside of the customs union and the single market. Friction is an inevitable side effect of Brexit, by nature,” the former Polish premier added.

The European Parliament — which will have the final veto on any Brexit deal — is set to publish its own demands for trade talks later on Wednesday in Brussels.

The EU has repeatedly called on Britain to lay out its position on a trade deal after it leaves the union in March 2019, and Tusk recently said he would publish the guidelines whether Britain was ready or not.

– ‘Hard facts’ –

May used her speech last week to call for a wide-ranging free-trade deal with the EU, while acknowledging it was time to face “hard facts” about the economic consequences of Britain’s shock 2016 vote to leave.

She said she wanted the “broadest and deepest possible agreement, covering more sectors and co-operating more fully than any free trade agreement anywhere in the world today”.

But the remaining 27 EU countries have vowed to resist all British attempts at “cherry-picking” — getting special treatment for Britain’s financial services and car industries — without the obligations and costs of membership.

A political declaration on future relations will be attached to the Brexit divorce agreement between Britain and the EU, which Barnier wants in place by November at the latest.

Any actual trade deal will have to wait until after Brexit day on March 29, 2019.

The EU’s free trade agreements with Canada, South Korea and Japan are the most likely model, Barnier said.

But huge hurdles lie ahead.

The Brexit withdrawal treaty is itself mired in difficulties, with London saying the EU’s official legal text of the preliminary divorce agreement they made in December makes unacceptable demands on the Irish border.

Barnier meanwhile warned that a planned post-Brexit transition period lasting until the end of 2020 — which leaders had been expected to approve at the March summit — was also at risk due to disagreements with London.

Britain would follow EU law during the transition in exchange for access to the single market, although losing its decision making powers.

Further doubts over whether the transition period will be long enough to negotiate a full trade deal — the EU-Canada agreement took seven years to craft — are also growing.

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