Don’t kid yourself over trade deals, EU tell Britain

The EU appears to have mocked Boris Johnson’s claim an Australian-style trade deal could be a post-Brexit model for Britain.

British Prime Minister Boris Johnson has been given a wake-up call from the EU. Picture: AFP

The EU appears to have mocked Boris Johnson’s claim that an Australian-style trade deal could be a post-Brexit model for ­Britain.

European Commission president Ursula von der Leyen ­expressed her “surprise” at the British Prime Minister’s comment last week that such a relationship might provide an acceptable framework before talks in the middle of the year.

Even Australia wanted a better relationship with Brussels than the present model, she said.

“I was surprised to hear the UK Prime Minister speak about the Australian model. The EU does not have a trade agreement with Australia,” she said.

Ms Von der Leyen told members of the European parliament that Australia traded with the EU on minimum World Trade ­Organisation terms and wanted a better deal to cut existing tariffs, trade quotas and checks.

“We are currently trading on WTO terms. And if this is the British choice, well, we are fine with that without any question,” she said.

“In fact, we just are in the ­moment where we are agreeing with Australia that we must end this situation, and we were going to try to deal with them. Of course the UK can decide to settle for less but I personally ­believe that we should be way more ambitious.”

Ms Von der Leyen made the comments while offering the British government an unprecedented zero tariffs and zero quotas trade agreement in ­return for Mr Johnson agreeing not to undermine existing common standards on workplace rights and the environment.

Speaking with her, ­Michel Barnier, the EU’s chief negotiator for a new trade and security ­treaty, to be agreed this year, slapped down a demand by British Chancellor Sajid Javid for easy and undisrupted trade in ­financial services for “decades to come”. In an article for London business newspaper City AM, Mr Javid urged: “If the EU, like us, wants a durable relationship, we should also include measures to directly address the long-term needs of industry for a reliable equivalence process.

“This is important not only in the short term, but to establish the norms and ways of working with the EU that will endure for decades to come.”

Mr Barnier rejected the ­demand. “I’d like to take this ­opportunity to make clear to certain people in the UK that they should kid not themselves about this. There will not be general, open-ended ongoing equivalence in financial services,” he said. “We will keep control of these tools and we will retain the free hand to take our own decisions.”

The EU has warned Britain that it will use its unilateral power to restrict access to financial services as a lever in the wider trade talks and to secure fishing rights for European boats in British waters after the end of the year.

Mr Barnier went on to say that if trade talks failed this year it would take up to seven years, as with the recent Canada-EU trade agreement, to cut the tariffs and quotas that would be introduced under WTO terms in 2021.

There is pessimism and growing gloom in Brussels over the trade talks. “We’re selling a ­Porsche Cayenne when all the UK wants is a Peel P50,” a diplomat said. “Two ships passing in the night.”

The Times