Brexit: Barnier says UK should be able to agree 'ground rules' with EU on trade given PM's standards pledge – as it happened
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Rolling coverage of the day’s political developments as they happened, including Boris Johnson and Jeremy Corbyn at PMQs and Michel Barnier’s Brexit speech
Michel Barnier, the EU’s chief Brexit negotiator, has said the UK should be willing to agree common “ground rules” with the Brussels as part of a trade deal given Boris Johnson’s claim to be committed to high standards. In a speech in Brussels (full text here), Barnier said that he believed Johnson did not want to turn the UK into a deregulated “Singapore-on-Thames”. But he also said that a trade deal would have to include rules to guarantee fair competition and that the UK could not have an off-the-peg Canada-style deal because “the UK is not Canada”. (See 4.39pm.)
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Here are the main points from Michel Barnier’s speech and Q&A.
Barnier, the EU’s chief Brexit negotiator, said that he accepted Boris Johnson’s claim that he does not want to turn the UK into a deregulated “Singapore-on-Thames”. He said:
Of course we have heard Prime Minister Boris Johnson’s assurances that the UK would never engage in a race to the bottom, that it would not seek to undermine European standards, that the UK would in fact maintain higher standards than the EU. And, to be frank, we are ready to believe this.
In fact, I do not believe that the UK will become some sort of Singapore-on-Thames.
But Barnier also said that, if the UK is committed to high standards, it should be willing to agree common “ground rules” with the EU. He said:
I do not believe that the UK will become some sort of Singapore-on-Thames.
What that means is it should not be a problem for the UK to agree on a number of ground rules.
And I want to be very, very clear.
We understand that the UK wants its own rule book. We respect that choice, the UK’s sovereign choice. That was the whole point of leaving the EU ...
Adam Fleming, the BBC’s Brussels correspondent, suggests Barnier was sounding a little more accommodating towards the UK at this point than in the past.
Has @MichelBarnier finessed his rhetoric on the level playing field? 🔹“I don’t believe 🇬🇧 will become some sort of Singapore-on-Thames.” 🔹”We understand 🇬🇧 wants its own rulebook.” 🔹”Let’s lay down together a number of rules building on our current high standards...”
Barnier said a simple Canada deal was not on offer to the UK. This is what the British government is now demanding. But Barnier said:
There is no single template. There was never, and there never will be, a single template. The UK says it wants Canada. But the problem with that is that the UK is not Canada.
Barnier explained that Canada was not an option because the UK was much closer to the EU than Canada, and its volume of trade with the EU was much bigger. That was why level playing field provisions mattered more, he said.
He said the EU was willing to offer the UK “super-preferential access” - in return for assurances that competition would be free and fair. He said:
We are ready to offer to the UK super-preferential access to our markets - a level of access that would be unprecedented for a third country.
Is this something we can do without firm guarantees that the UK will respect the level playing field and avoid unfair competitive advantages? The answer, I’m afraid, is simple. We cannot.
We want competition in future but it must be fair - fair and free ...
That is why we are asking that the EU and the UK lay down together a number of rules building on our current high standards in specific areas: state aid, environmental protection and the fight against climate change, social and labour rights and taxation issues. This way we will make sure that somewhere down the road, perhaps in years to come, neither side will use unfair subsidies, nor grant derogations on industrial emissions or on labour standards to win industries from the other.
He said that the EU would strictly enforce rules of origin checks on British goods entering the single market from 2021 - even if there is a trade deal. Explaining why, he said:
On 1 January 2021, whatever the outcome of the negotiation, there will be checks and controls on all UK goods entering the single market as there are for any third country.
These checks are particularly important given the UK’s position as a major entry point into the single market and as part of these checks we will need to pay the greatest attention to the rules of origin that we will put in our trade agreement.
Of course we love ‘Made in Britain’ but we must guarantee that the goods we import from the UK - tariff and quota free - really are British.
We cannot take the risk that the UK becomes a kind of assembly hub for goods from all over the world, allowing them to enter the single market as British goods.
He said the EU would not allow British financial institutions to get permanent equivalence status for trading in the single market from 2021. Earlier this month it emerged that the UK would be asking for permanent equivalence. But Barnier said that, although the EU would be willing to grant equivalence (the right to do business, subject to certain conditions) in some sectors, equivalence decisions would remain temporary, and subject to EU discretion. He said:
We will do so when it is in the interests of the EU, our financial stability, our investors and our consumers. But these equivalences will never be global nor permanent, nor will they be subject to joint management with the UK. They are, and will remain, unilateral decisions.
He said a “point of concern” for the EU was the extent to which the British government now seems to be “distancing” itself from the commitments made on Northern Ireland border rules (in the legally binding Northern Ireland protocol) and on level playing field commitments (in the political declaration). He said the EU needed to check what the UK’s intentions really were in these areas “in the next few days and weeks”.
Michel Barnier with his award of an honorary degree from the ESCP Business School in Brussels, which was presented to him after he gave a speech to students from the college. Photograph: François Lenoir/Reuters
Barnier has finished his speech. He is now taking questions.
Q: Has anything surprised you in the Brexit negotiations so far?
Barnier says what was surprising was that the PM could not reach a majority for a deal.
He says he once asked Nigel Farage what his vision was for life after Brexit. He says Farage told him that after Brexit the EU would no longer exist. He says that showed that, for some people behind Brexit, they wanted to use it to destroy the EU.
He says he is surprised by how far the British government has moved from its previous commitments (ie, in the Northern Irish protocol and in the political declaration). But the EU will have to check this in the coming days and weeks, he says.
Q: You say you think the British government is distancing itself from the withdrawal agreement, and what it said about Ireland. Do you think Ireland could unite in the coming years, and Northern Ireland rejoin the EU that way?
Barnier says he listens to everybody, including people from Northern Ireland and from Scotland. But he does not want to intervene in the national debate in the UK.
Q: What are the changes since 1973 that led to the UK leaving the EU?
Barnier says the UK joined the EEC mainly for trade reasons. But for Europeans, the EU is more than a supermarket, or a free trade zone. It has become an economic ecosystem. And that is why China and the US respect the EU, he says. That is why the EU will never let it unravel.
He says there are specific British reasons for Brexit. But there are common popular views. There are many British regions where was is behind Brexit is “social anger”, and the feeling that the EU does not protect people. Politicians must take the time to listen, to understand and to respond, he says. He says it is too late to do this in Britain, but not elsewhere.
And he says you should not confuse this popular sentiment with populism. Populism used this sentiment, he says.
And he says there are answers to people’s concerns.
Q: How will the EU make up for the loss of the UK’s contribution?
Barnier says the UK has been a net contributor to the EU budget. The loss amounts to 1% of the EU’s GDP, he says. But he says there is a huge and very difficult debate about the budget. This debate has never been easier, but it has been made harder by the departure of the UK. The gap amounts to €10bn.
Barnier says the UK is insisting a lot on its own sovereignty.
He says nobody contests this.
The EU respects the UK’s sovereignty, he says. But it is not just a matter of sovereignty; it is a matter of pragmatism too.
From January 2021 there will be changes in many areas, he says.
He says the more the UK seeks to distance itself from the common rules established over years, the more the relationship will be separate, sector by sector.
He says the EU is not proposing that the UK loses control; it is offering the UK to use its sovereignty for mutual advantage.
The UK is leaving 600 international agreements by virtue of Brexit, he says. This will have consequences from 2021, even if there is a deal.
He says he has three examples.
First, from 1 January 2021 there will be checks and controls on all UK goods entering the single market, as with any third country. This will apply even if there is a deal. He says this will involve attention being paid to rules of origin. The EU loves “made in Britain”, he says. But it will want to know these goods are made in Britain. Britain cannot just become an assembly hub.
Second, from January 2021 UK financial services firms will lose the financial passport. They will not be able to offer services in all EU states based on being British. He says they might have to establish themselves in an EU country. In some sectors the EU will grant equivalences, where it is in the EU’s interest. But they will “never be global and permanent”, and never be subject to joint management with the EU, he says.
As a former financial services commissioner, Barnier says the EU cannot allow the UK to keep profits, while the EU takes on the risk. The EU must take responsibility for its financial supervision, and financial responsibility.
Third, on goods, Barnier says the UK will not be able to grant market authorisations for things like cars and pharmaceuticals for the EU market. This function must be carried out in the EU, he says.
Barnier says UK cannot get Canada trade deal because 'UK is not Canada'
Barnier has now switched to speaking in English.
He says trade is about more than boosting economic performance. It is also about maintaining and promoting high standards, he says.
He says the EU has heard Boris Johnson’s assurances about planning to never engage in a race to the bottom. Johnson says he has higher standards, he says. And Barnier says he believes Johnson on this.
He says that means it should be possible for the two sides to agree on ground rules.
The UK wants to be sovereign, Barnier says. He says the EU accepts that. But he says trade deals are about opening up markets.
There is no single template that could apply for a trade deal with the UK, he says.
He says the UK says it wants a Canada-style deal. “But the problem with that is that the UK is not Canada,” he says.
He says you can fly from Brussels to London in 70 minutes. The flight to Ottawa takes more than 10 hours, he says.
And he says trade with the UK is worth more than 10 times more than trade with Canada.
He says because the UK is on the EU’s doorstep, the EU will insist on a level playing field. Competition must be free and fair, he says.
That is why they want level playing field provisions, he says, covering state aid, environmental protection, climate change, social and labour rights and taxation.
Barnier says the EU had a complex negotiation with Boris Johnson to ensure no return of a hard border in Ireland.
The UK has now left. But a transitional period applies, he says.
Boris Johnson has said “again and again” that he will not request an extension to the transition, Barnier says. So both sides have to make the best use of the limited time available.
The withdrawal agreement must be implemented, he says. He says this is a matter of trust.
Barnier is recalling the referendum held in France in the early 1970s to decide whether Britain, Ireland, Denmark and Norway should be allowed to join what was then the EEC.
He says he voted yes, even though he was a Gaullist and General de Gaulle was opposed.
He says an interviewer recently asked why he was negotiating a new Brexit agreement, when he had already spent three years negotiating Brexit. Brexit is a divorce, he says. And all divorces have consequences. These consequences were poorly explained, he says.
He says no one has been able to show him the added value of Brexit, even Nigel Farage. But where the risk is the highest is in Ireland, he says.
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