Politics, World, Europe

Brexit: Rocky year of economic transition ahead

EU finds British Prime Minister Johnson’s scenario on EU-UK trade deal unacceptable, says key MEP

Agnes Szucs   | 28.01.2020
Brexit: Rocky year of economic transition ahead

BRUSSELS 

British Prime Minister Boris Johnson’ scenario on EU-U.K. trade relations after Brexit are “politically and economically absurd” for the European Union, Pascal Canfin, chair of the European Parliament’s Committee on Environment, Public Health and Food Safety (ENVI), told journalists at a briefing Monday.

After nearly three years of deadlocked negotiations and severe turmoil in British politics, last October the European Union and the U.K. finally agreed on the terms of the withdrawal agreement. Following the British parliament’s approval, European Commission President Ursula von der Leyen and European Council head Charles Michel last week signed the document.

The last act is for the European Parliament to ratify the deal Wednesday before the U.K. officially leaves the EU on Friday.

“The political Brexit is done, but the economic Brexit is ahead of us,” said Canfin, who belongs to the EP’s liberal-centrist political group Renew Europe.

Under the deal, the same conditions will apply between Feb. 1 and Dec. 31 as before, but the EU and U.K. need to negotiate the terms of further economic cooperation in the transition period.

‘No-go’ British proposal

Johnson favors a scenario in which British goods and services can enter the EU market without any tariffs or quotas while the U.K. can stop fully complying with EU rules. As Canfin said, this plan is a “complete no-go” for the EU because “it would give more power to the country leaving the bloc than to those who remain.”

"If you don’t follow the regulatory line, you are out of the single market,” he added, summing up the EU’s message.

In other words, the EU will no longer directly regulate the production of British goods but will control their market access. So either Britain has to accept the EU regulations on production or it has to put up with limited access to the market, resulting in quotas and tariffs.

The EU’s aim is to preserve its high food safety and environmental standards as there is a risk that British goods may gain unfair business advantage by using lower standards after Brexit.

The EU also wants to negotiate fair terms for fisheries, including allowed quotas and techniques on seawaters that the bloc shares with the U.K.

Additionally, the EU finds it important to maintain the supply of British medicines and to avoid medicine shortages after Brexit, given that the U.K.'s pharmaceutical industry plays an important role in the European market.

2021 agreement, extension, or no-deal

The EU’s negotiation team led by Michel Barnier will regularly consult with European Parliament committees as they specialize in these topics and have the necessary technical expertise, Canfin said.

The chair of the ENVI committee thinks it is highly likely that the negotiators will not reach an agreement by the end of the year. An extension would be acceptable for the EU, but Johnson is insisting on entering into the new phase in 2021 even without an agreement.

In order to strengthen his political position, the British premier might want to conclude a trade deal with the U.S. before its presidential elections on Nov. 3. But a quick agreement would effectively result in the U.K. accepting the U.S. terms. It would make a deal with the EU even more difficult, because the U.K. would become an entry point for U.S. goods to the EU through Northern Ireland.

“The EU shouldn’t be afraid of having an economic no-deal” with Britain, Canfin argued.

“We can live with it, but I am not sure if Great Britain can,” he said, noting that 50% of the U.K.’s total exports go to the EU, while only 7% of the EU’s imports come from the U.K.

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