Trade negotiations tend not to begin with two sides in agreement – otherwise there would be nothing to negotiate.
So it’s not surprising to see the UK and EU set out rather different positions before talks begin in earnest.
There are some broad similarities. The two sides agree they want a free-trade agreement, with no tariffs (border taxes on goods) or quotas (limits on the amount of goods). They are also keen to include as much of the service sector as possible.
But that’s the easy bit and this is likely to become a bruising experience for all involved.
Terms and conditions always apply – and there are several possible flash-points.
Level playing field
First and foremost, the EU wants the UK to sign up to strict rules on fair and open competition, so if British companies are given tariff-free access to the EU market, they cannot undercut their rivals. These are known as level playing field guarantees and they have been a constant theme in the EU’s negotiating position for nearly two years.
Most importantly, its negotiating directives, adopted on 25 February 2020, say a future partnership must “ensure the application” in the UK of EU state-aid rules on subsidies for business. The UK would also be required to stay in line with the EU’s rules on environmental policy and workers’ rights in a way that would “stand the test of time”.
But the government has now rejected this approach entirely. The political declaration it agreed with the EU last year did speak of level playing field commitments but, armed with a big majority in the House of Commons, it has toughened up its language. In a document outlining the UK’s approach to negotiations published on 27 February 2020, it said: “we will not agree to any obligations for our laws to be aligned with the EU’s”.
Instead, Boris Johnson has said he would create an independent system that would uphold the UK’s international obligations and not undermine European standards. “There is no need for a free-trade agreement to involve accepting EU rules on competition policy, subsidies, social protection, the environment or anything similar,” he said.
He has also pointed out that there are areas such as maternity rights in which the UK has higher standards than the EU and that the UK spent far less money on state aid than Germany or France.
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