The president of the European Council, Donald Tusk, has set out draft Brexit guidelines for the next phase of negotiations.
Tusk’s draft Brexit guidelines warn that the ‘red lines’ adopted by the UK in negotiations are set to weaken the relationship between the country and the EU, saying: “The repeatedly stated positions of the UK … limit the depth of such a future partnership”.
However, the draft also suggests that if Britain is willing to change its stance on some of these red lines, the EU is also open to shifting its demands. It reinforces the EU’s desire to have the closest possible partnership with the UK, particularly in areas such as:
- Counter-terrorism;
- International crime;
- Defence;
- Foreign policy; and
- Security.
The draft suggests that the only viable approach to the future relationship between the UK and the EU will be a free trade agreement, although it also insists that such an agreement could not amount to participation in the single market without accepting other EU conditions such as free movement of people.
What would a free trade agreement offer?
Negotiation of a free trade agreement would be concluded once the UK is no longer an EU member state, and the European Council has announced that it is ready to begin working towards an agreement.
The draft Brexit guidelines issued by Tusk argue that a free trade agreement would address a number of key areas, including:
- Trade in goods across all sectors;
- Customs co-operation to preserve regulatory autonomy;
- Sanitary standards and technical barriers to trade; and
- Access to and trade in services under host state rules.
However, the guidelines make no mention of incorporating financial services into a trade agreement something which UK Chancellor Philip Hammond has argued should be included, because it would be in the “mutual interest” of both parties. The EU’s Brexit negotiator, Michel Barnier, has previously said that including financial services in a free trade agreement has never been done before.
