BRUSSELS – Michel Barnier has given ‘a stark warning’ that the U.K won’t benefit from “frictionless trade” with the bloc after Brexit, said The Wall Street Journal.
In an ‘unusually blunt and detailed public discussion,’ the European Union’s chief Brexit negotiator told trade unions and businesses that he wasn’t sure the EU position was “fully understood across the channel.”
“I have heard some people in the U.K argue that one can leave the single market and build a customs union to achieve ‘frictionless trade,”’ he said.
‘That is not possible.’
His comments come after a spokesman for Prime Minister Theresa May said on Thursday (07/07) that the U.K government is seeking a free trade and customs deal that allows “for trade that is as frictionless as possible.”
“I have to work with the U.K government as it is today and based on what it is telling me,” said Mr Barnier.
In the first round of talks in June, Brexit Secretary David Davis confirmed to Mr Barnier that the U.K wants to leave the single market and the customs union.
‘Divisions within the U.K government have emerged in recent weeks on this issue,’ and Mr Barnier has said the EU are preparing “for all situations,” in case the British position changes.
He also announced that the EU would not be preserving its special ‘passporting’ arrangement with the British financial sector whereby U.K-based banks can operate in other EU countries.
Mr Barnier also made it clear that Mrs May’s idea that “no deal would be better than a bad deal” would be disastrous.
Without a Brexit deal, he explained, trade between the EU and the U.K would be dictated by World Trade Organisation rules.
“In practice, ‘no deal’ would worsen the ‘lose-lose’ situation which is bound to result from Brexit,” he said.
“And the U.K would have much more to lose than its partners.”
‘Despite the bluster and grandstanding from various opposition figures and commentators in Britain,’ says Hugo Bennett on BrexitCentral.com, the UK’s post-Brexit citizens’ rights proposal ‘already comes remarkably close to the EU’s.’
The UK and the EU have published their post-Brexit citizens’ rights proposals.
Of course, there are differences, says Bennett: ‘If the EU’s opening offer was entirely acceptable to the UK, or vice versa, there would clearly be no need for a negotiation at all.’
‘Nonetheless, despite the bluster and grandstanding from various opposition figures and commentators in Britain, the UK offer already comes remarkably close to the EU’s in the majority of areas.’
Here, the key issues are split into ‘areas of broad agreement’ and ‘areas requiring substantial negotiations.’
Scope of the deal. Both sides agree that the deal should apply equally to all EU27 citizens, and that the ‘existing special arrangements’ between the UK and Ireland must be preserved.
Benefits. This has historically been a sticking point for the UK and the EU. But the UK has committed to allow all EU citizens that arrive before the ‘cut-off date’ to carry on ‘exporting benefits,’ even to children living in other countries.
Bennett sees this as a ‘major compromise.’
Healthcare & Pensions. Both sides wish to preserve current citizens’ rights regarding healthcare arrangements, with UK and EU citizens ‘free to use each others’ health services, which will then be reimbursed by the appropriate member state.’
Brexit Secretary David Davis has also said that even if no deal is reached the UK will ‘continue paying unilaterally’ for the healthcare of British expats living in the EU.
He has also committed to continue ‘uprating’ the state pensions (by increasing them using the famous “triple-lock” system) of such UK nationals.
These ‘significant moves should provide much reassurance to British citizens currently living in the EU,’ says Bennett.
Students & Qualifications. Both sides agree on the need for ‘the continued mutual recognition of qualifications obtained prior to Brexit,’ and that EU students shouldn’t be restricted from starting courses in the UK over the next few years.
Application procedure. ‘The UK and the EU disagree over whether eligible citizens in the UK and the EU should be considered legally resident without documentation,’ the newly arriving citizens’ rights will change after the ‘cut-off date.’
The EU is seeking reassurances that the British application process will be ‘straightforward, following the many stories about EU citizens struggling with existing Home Office procedures.’
Areas requiring substantial negotiation
Cut-off date. The EU wants it to be ‘Brexit day itself: 29th March 2019, or the day after.’ The UK wants it to fall somewhere in-between Brexit day and the date Article 50 was triggered: 29 March 2017.
‘This is one area where the UK can probably afford to compromise,’ says Bennett, ‘in order to secure concessions from the EU in other areas.’
‘Family reunion rights is set to be a major crunch point between the UK and the EU.’
Permanence of rights. The EU wants “settled status” to be ‘permanent once acquired,’ whereas the UK says it would be lost if a person left the UK for more than 2 years.
‘This will need to be resolved but should not be overly difficult to find an acceptable compromise on,’ says Bennett.
Family reunion rights. The ‘key point of dispute’ is the EU calling for family members of EU citizens being able to join them ‘before or after the withdrawal date.’
These ‘super-rights’ for EU citizens would ‘exceed what UK nationals have themselves in the same country.’
The UK proposes to guarantee children’s rights to join EU parents after Brexit, automatically granting them British citizenship, but says that spouses (and other family members) must meet the same criteria ‘as equivalent relations of UK nationals.’
‘This is set to be a major crunch point between the UK and the EU,’ says Bennett.
Jurisdiction. ‘The biggest disagreement by far between the two sides is over how the deal should be enforced legally.’
The EU wants the deal to be enforced under the remit of the European Court of Justice, whereas the UK is insisting on some kind of joint arbitration court of UK and EU judges.
Just like the EU has made it clear that the four freedoms (goods, people, services and capital) are indivisible, this is a red line issue for the UK.
‘Compromise will be required from both sides, not just the UK, if the Brexit process is to process smoothly and successfully,’ says Bennett. ‘But there is no reason why this should ultimately not be possible.’